Question:

Let's understand whether the bear market and recent issues with CeFi products have changed centralized exchange users' behavior.

Explore trends in exchange withdrawal (specifically, moving money from CEX addresses onto the chain) patterns over the last 6 months. Have those withdrawals increased? Has the typical size of them changed? Most important: are people creating new wallets to take custody of their CeFi deposits?Also have a look at what people do after a withdrawal: are they holding their withdrawn tokens? Or are they fiat-on-ramping so they can swap, provide liquidity, buy NFTs, etc

Overview of study:

The fundamental principle behind Centralized Exchanges (CEX) is that all crypto trading orders are routed through a central exchange under a centralized finance. Examples of CeFi companies include: Binance, Coinbase and Kraken. Users create accounts in these exchanges and use the same platform to send and receive tokens. That's not all, though. In addition to crypto transactions, these exchanges also offer various services such as loans, borrowing and margin transactions.

In this study, the moving money from CEXs onto the chains has been investigated in the past 6 months to evaluate the their behavior and application during Bear market.

Approach:

• Ethereum Network:

  • CEX addresses:

    SELECT * FROM Ethereum.core.dim_labels where label_type = 'cex' and label_subtype = 'hot_wallet'

  • Used table:

    select * from ethereum.core.ez_token_transfers

• Solana Network:

  • CEX addresses:

    SELECT * FROM Solana.core.dim_labels where label_type = 'cex' and label_subtype = 'hot_wallet'

  • Used table:

    select * from solana.core.fact_transfers

The analysis done for the past 6 months for both Ethereum and Solana networks.

Part 1: Ethereum Analysis

Notable findings:

The summary of results due to the analysis of CEXs flow on Ethereum network are as below:

• The most used CEX platforms in the Ethereum network Binance, FTX and Kucoin.
• The daily number of moves from CEXs onto Ethereum reveals the highest usage during market tolerant specially between May 11 to 13.
• From the USD value point of view, the highest flow happened on June 17 with near 50 billion USD in the single day!
• The cumulative graph shown the breakpoints on special dates like May 12 and June 17 that slope of chart increased dramatically.
• The average USD volume of flow money from CEXs onto Ethereum blockchain happened on June 17 with 1.67 million USD.
• As expected the most used tokens to transfer money are stablecoins like USDT and USDC in the past 6 months.

Key findings:

The application of these moved money from CEXs onto Ethereum are summarized as below:

• The first action after moving money onto Ethereum are Transfer and Swap action with highest share among other actions.
• From the exploration in this study, the most used sector after moving from CEXs onto Ethereum are CEXs, DEXs and DeFi programs.
• One of the favorite actions after moving from CEXs onto Ethereum is swap action. The WETH token is the most popular token that users swap their stable coins to it.
• The BOND and CAW tokens are the other most popular tokens users swap their stable coins after moving their money from CEXs.

Part 2: Solana Network

Key findings:

The moving money from CEXs onto Solana network analyzed in this section and the outcomes have been summarized as below:

• The most used CEX platforms in the Solana blockchain are FTX, Coinbase and Huobi Global.
• The moving money from CEXs onto Solana blockchain in the past 6 months reveals the highest usage in the first 3 month of chosen time period specially before market downturn happened in May and Bear market in June.
• The most used tokens that move from CEXs onto Solana are wrapped SOL, mSOL, USD coin and USDT. But, the domination of SOL token is considerably high among other tokens.
• The popular action after move money from CEXs to Solana is transfer them to CEXs.

References and useful links:

• Bear market
• CeFi products
• CeFi products 2

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani