FTX and Volatile Week

FTX Exchange is a leading centralized cryptocurrency exchange specializing in derivatives and leveraged products. Founded in 2018 by MIT graduate and former Jane Street Capital international exchange-traded funds trader Sam Bankman-Fried, FTX offers a range of trading products, including derivatives, options, volatility products, and leveraged tokens. It also provides spot markets in over 300 cryptocurrency trading pairs such as BTC/USDT, ETH/USDT, XRP/USDT, and its native token FTT/USDT.

Alameda Research operates as a principal trading firm. The Company provides market making services for dozens of coins across the top crypto exchanges. Alameda Research serves customers worldwide.

Fears over a withdrawal run from the billionaire Sam Bankman-Fried's FTX cryptocurrency exchange sent digital-asset markets into a fresh tailspin on November 7th, hitting altcoins including the trading venue's own FTT as well as the Solana blockchain's SOL.

this dashboard will look at FTX Collapse impact on ETH and other top altcoins in November.

Scopes

1. Osmosis Swapping Activity
2. Bridges to/from Osmosis through Axelar Satellite
3. Top Sources and Assets Bridged to Osmosis
4. Actions After the Bridge to Osmosis

FTX Hack Story and its Impact on Ethereum

The Bahamas-based crypto exchange FTX has been in the news for all the wrong reasons. Legal troubles had just started for the company when the news of an unauthorised outflow of its assets under ‘suspicious circumstances broke the internet. \n According to a report in Coindesk, a hacker stole $600 million from the exchange's wallets on 11 November. The hacker traded Ether tokens valued at millions of dollars for Ren Bitcoin (renBTC), which is an open protocol for transferring cryptocurrencies between blockchains and is powered by the Ethereum-based token Ren (REN).

Just one day after it filed for bankruptcy, the troubled FTX exchange's accounts were raided. According to blockchain intelligence startup Elliptic, more than $663 million in various crypto assets were stolen. A blockchain security firm called Beosin claims that the attacker held nearly $338 million in cryptocurrency after engaging in numerous cross-chain transactions the day before.

On 20 November, according to blockchain tracker PeckShieldAlert, the exploiter exchanged around 5,000 Ether for 347 renBTC earlier on Sunday. RenBTC is a wrapped Bitcoin on Ethereum that can be redeemed for native Bitcoin. The drainer then made a second trade for 344.53 renBTC, nearly the same amount.

The exploiter then started using Ren's BTC Gateway to bridge the freshly exchanged renBTC out of Ethereum, effectively cashing out of the Ethereum blockchain in favour of native Bitcoins. Around 45,000 Ether had been traded as of (7 a.m. ET). The Ren bridge has already been used to launder at least $540 million in stolen money, according to a study by blockchain analysis company Elliptic, as it gives users anonymity. \n Ren Bridge basically stands for cross-chain bridges that are used by hackers in the crypto world to launder money by sending digital assets across blockchains, bypassing a centralised service that can trace and freeze transactions. On-chain examination of the new wallet reveals that the exploiter began converting Ether to renBTC using the decentralised exchange aggregator 1inch. The first of these transactions was the conversion of4,000 ether to wrapped bitcoin (wBTC), another token representing Bitcoin, and subsequently to renBTC.

Impact on Ethereum: The actions of the alleged "FTX Accounts Drainer" have tarnished Ethereum after days of trading FTX-stolen cryptocurrencies for Ether. The price of ether has fallen by over 5 percent since the sale started as a result of the relentless selling from the FTX account drainer. The cost is now hovering at $1160 after falling below $1,200.

Despite the significant selling, the wallet listed on Etherscan as "FTX Accounts Drainer" is still the 37th largest Ether holder, having previously been among the top 30. The decline happened when around 50,000 ETH was transferred to a wallet with the prefix 0x866E, which is trading ether for renBTC.

ETH Swaps

ETH Transfers

Swap and Transfer Size Distribution Changes

🟠 Observations

• the ETH price started to drop in Nov 7th, and from $1,580 reached $1,227 on Nov 9th
• the swapping activity raised significantly on Nov 8th, 9th, and 10th.
• the ETH swap volume peaked at $28.4B on Nov 10th
• the sell $volume on all days is much higher than the buy volume but on the collapse days the sell volume spiked heavily, on Nov 10th the sell volume was $26.47B but the buy volume was only $1.77B
• this heavy selling pressure in DEXs affected the price significantly.

🟠 Observations

• since Nov 7th the ETH Transfer volume between CEXs and wallets spiked, also the Miners transfer volume had a significant increase

• the volume of ETH transfer from CEXs to non-miner wallets was higher than vice versa. this can indicate that in fear of central exchange and withdrawal issues, users preferred to exit from CEXs to be safer

• top sectors in the collapse days are DEXs and CEXs

• on the Nov 9th, the ETH transfer volume to DEXs and CEXs peaked at 2.8M and 4.8M ETH which is 4X-5X higher than before collapse days

• Binance with $2.35M only on Nov 9th is the top CEX that users transferred their ETH into. Coinbase, Unisawp 1Inch and bitfinex are the next top DEXs and CEXs

🟠 Observations

• in the collapse days, the swap sizes got much bigger. before the collapse, 5% of swaps were bigger than $10K but in the collapse spiked and peaked at 22.7% on Nov 9th, also in this day the swaps between $1K-$10K spiked from 18% to 31%

• in the collapse days, the transfers between $1K-$10K increased from an average of 44K transfers per day to 74.46K on Nov 9th

• also the number of transfers bigger than $10K increased from 12K per day to 30.7K on Nov 9th

• these numbers show that bigger wallets transferred their ETH after the collapse

🟠 Observations

• On the first day of November when FTX was working normally the ETH price was $1583 but now (Nov 23rd) the ETH dropped -27% and reached $1154.
• the most affected token is SOL (The Solana Foundation also owns 3.24 million common shares of FTX Trading LTD) which now dropped -61.7%
• the best token is LTC that even increased by 27.3%

Method

• I used crosschain.core.fact_hourly_prices and crosschain.core.dim_asset_metadata to find the asset’s price and name.
• firstly we will compare the price of top market assets during November to see which assets are impacted more. then we will analyze what happened and how it affected the ETH price.
• we will look at ETH transferring to CEXs and DEXs and swapping in decentralized exchanges.

💡 Conclusion

• On the first day of November when FTX was working normally the ETH price was $1583 but now (Nov 23rd) the ETH dropped -27% and reached $1154.

• the most affected token is SOL (The Solana Foundation also owns 3.24 million common shares of FTX Trading LTD) which now dropped -61.7%. the best token is LTC that even increased by 27.3%

• since Nov 7th the ETH Transfer volume between CEXs and wallets spiked, also the Miners transfer volume had a significant increase

• the volume of ETH transfer from CEXs to non-miner wallets was higher than vice versa. this can indicate that in fear of central exchange and withdrawal issues, users preferred to exit from CEXs to be safer

• on the Nov 9th, the ETH transfer volume to DEXs and CEXs peaked at 2.8M and 4.8M ETH which is 4X-5X higher than before collapse days

• Binance with $2.35M only on Nov 9th is the top CEX that users transferred their ETH into. Coinbase, Unisawp 1Inch, and bitfinex are the next top DEXs and CEXs

• in the collapse days, the swap sizes got much bigger. before the collapse, 5% of swaps were bigger than $10K but in the collapse spiked and peaked at 22.7% on Nov 9th, also in this day the swaps between $1K-$10K spiked from 18% to 31%

• in the collapse days, the transfers between $1K-$10K increased from an average of 44K transfers per day to 74.46K on Nov 9th. also the number of transfers bigger than $10K increased from 12K per day to 30.7K on Nov 9th. these numbers show that bigger wallets transferred their ETH after the collapse

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The main reasons for ETH price drop is the significant high Volume pressure in ETH Selling in DEXs and also Transfering ETH a high amount of ETH to CEXs