What is Tornado Cash?

Tornado Cash, along with other mixers such as AlphaBay, enables customers to conceal the source of their crypto funds when participating in a transaction in exchange for a fee. It blends potentially identifiable or tainted cryptocurrency funds with others to obfuscate the source and destination of crypto assets.

What are L1 vs. L2s?

Layer 1 is the main blockchain network in charge of on-chain transactions, while Layer 2 is the connected network in charge of off-chain transactions. The Bitcoin network is Layer 1. It offers an abysmal speed of five to seven transactions per second (tps).

What are sanctions?

Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they may also be imposed for a variety of political, military, and social issues.

What is happening to Tornado Cash?

Tornado Cash is in the news due to the sanctions imposed by the US government and the freezing of $75K of USDC from Circle. The addresses tied to the service have been publicly posted online.

Methodology

This dashboard is looking to see the Tornado Cash activity on non-Ethereum Blockchains recently before and after the sanctioning of Tornado Cash’s Ethereum wallets on August 4th 2022. For this dashboard the data will come from the avalanche.core ,polygon.core , optimism.core, and the arbitrum.core data tables in Flipside crypto’s database. Additionally, all the data for this dashboard on L2s come after mid-June and in May for Avalanche.

Tip:

If you want to change from looking at Arbitrum Tornado Cash to Optimism switch the “layer_two“ select box and click “Apply All Parameters“.

Observations

• There was only one transaction on Arbitrum sending ETH to Tornado Cash after tornado cash was sanctioned on August 4th, while on Optimism there have been 15 transactions sending 7.8 ETH to Tornado Cash after the sanctions.
• On Optimism 1 ETH and 0.1 ETH make most of the Tornado Cash transaction volume while on Arbitrum 10 Eth transactions make up the majority of Tornado cash volume.
• There has been a consistent decline in the use of Tornado Cash on both Arbitrum and Optimism since mid June 2022.

Observations

• On Avalanche there have been 53 transactions sending 1430 AVAX to Tornado Cash after the sanctions.
• On Avalanche 500 AVAX make most of the Tornado Cash transaction volume while 100 AVAX transaction make up most of the transaction.
• There has been a consistent decline in the use of Tornado Cash on Avax since May 2022.

Observations

• On Avalanche there have been 75 transactions sending 7500 MATIC to Tornado Cash after the sanctions.
• On Avalanche 10K MATIC make most of the Tornado Cash transaction volume while 1K MATIC transaction make up most of the transaction.
• There has been a consistent decline in the use of Tornado Cash on MATIC since June 2022.

Conclusion

Overall, there has been only a small amount of activity on Tornado Cash on non-Ethereum chain since the sanction of Ethereum Tornado cash wallets on August 4th, 2022. when comparing Tornado Cash activity on these chains since the sanctions Polygon had the most Transactions while Avalanche had the most value sent into the contracts. Some thought that users would run to Tornado Cash on non-Ethereum blockchains when the address on Ethereum were sanctioned, this has not occurred so far and the active on these contracts have been declining.