Introduction

Tornado Cash is a mixer on the Ethereum blockchain. The mixer is used to hide and remain private while transferring ETH. However, the service is often used by bad actors to “clean” their ETH, effectively replacing the stolen or illegally obtained crypto with crypto that is untracked or otherwise “clean”. For this reason, the US government has imposed sanctions on all Tornado Cash addresses and contracts. Meaning, any ETH or wallets which have interacted with the mixer may get into legal trouble if used on CEXes with USA KYC or AML policies. This is a bold move from the government and imposes a bad precedent for the future of crypto legislation and prosecutions.

Method

This dashboard will analyze the following:

• The volume each mixer has received over several timeframes.
• The total value of ETH mixed.
• The value and volume of other tokenns mixed on the platform.

Deposit and Withdrawal Volume

The patterns of Deposits and Withdrawals are fairly uniform between all addresses. No matter the size of the surge of deposits, there is an equal surge in withdrawals several weeks or months later. It is interesting to see that the 0.1 and 1 ETH addresses have a similar amount of Deposits/Withdrawals while the 10 and 100 ETH addresses also follow a similar pattern. The total USD value of ETH deposited and withdrawn also increases almost exponentially from each address to the next.

Transactions & Popularity

The charts for both transactions over the entire time Tornado has been functional and the transactions are almost identical. The most popular mixer is the 1 ETH transaction size and the least popular is a tie between 0.1 and 100 ETH. For the chart of Transaction Volume compared to the price of ETH, simply divide the numbers on the sides by 1000 to get the real number. As we can see from the chart, the price of ETH does not directly have an affect on the transaction volume of Tornado. However, these numbers only represent the month of July 2022.

Stablecoins & wBTC

Tornado Cash offers more than just ETH mixing. For the users who do not want their crypto to drop or gain in value while it sits in the mixer, they are given the choice to deposit a stablecoin. The bar chart above shows that DAI is by far the most popular Stablecoin to deposit, with almost 7 times more transactions than USDT, the 2nd most popular. Stablecoins have almost 800 million USD worth of volume in Tornado Cash.

wBTC is the other ERC20 token available to deposit on Tornado Cash. Users have transacted more than half a million USD worth of it on the platform. Most users deposit 10 BTC at a time, with 0.1 (the smallest choice) being the least popular. I assume this is because there are simply more whales using the platform and more money to be laundered.

Conclusion and Key-Takeaways

Tornado Cash is a very popular and widely used protocol on the Ethereum blockchain. However, it is very often given a bad repution because of how often it is used by bad actors in the community. For example, the exploiter of the Ronin Bridge has used Tornado Cash to launder all of the money they stole. Therefore, the protocol was an easy target for government entities trying to set a precedent for future crypto legislation. Overall, this dashboard shows that:

• Tornado Cash is widely used outside of just for ETH, with almost 1.5B USD worth of volume in other tokens.
• Usage of the protocol on matter the price action of ETH.
• There is a fairly uniform pattern of deposits and withdrawals, as well as for the size of these deposits and withdrawals.

Appendix

This dashboard was written on 08/09/22 (with only several hours to complete it).

Data from Flipside Crypto

Sources:

You can contact me on discord @ visio#6636 if needed