Crypto awakening: Researcher explains ETH exodus from exchanges

Blockchain analytics carried retired by a Nansen researcher has highlighted outflows of Ether (ETH) and stablecoins from centralized exchanges successful the aftermath of FTX’s collapse.

Nansen probe expert Sandra Leow posted a thread connected Twitter unpacking the existent authorities of Decentralized Finance (DeFi), with a circumstantial absorption connected the question of ETH and stablecoins from exchanges.

As it stands, the Ethereum 2.0 deposit declaration contains implicit 15 cardinal ETH portion immoderate 4 cardinal Wrapped ETH are held successful the WETH deposit contract. Web3 infrastructure improvement and concern steadfast Jump Trading holds implicit 2 cardinal ETH tokens and is the 3rd largest holder of ETH successful the ecosystem.

The existent authorities of DeFi successful @nansen_ai charts

— sandra lmeow (@sandraaleow) November 22, 2022

Binance, Kraken, Bitfinex and Gemini wallets diagnostic successful the largest ETH balances database portion the Arbitrum furniture 2 roll-up span besides holds a important magnitude of Ether.

As Leow explained successful correspondence with Cointelegraph, the percent summation of ETH held successful astute contracts tin beryllium seen arsenic an indicator of ETH flowing into assorted DeFi products. This includes decentralized exchanges, staking contracts and custody services.

The caller illness of FTX whitethorn person als led to fears for users holding assets with third-party custodians similar centralized exchanges. Leow highlighted the world that the information of funds held connected exchanges whitethorn not beryllium guaranteed:

“There is an amplification for the quote, “Not your keys, not your coins”, and this is particularly important fixed times similar these.”

According to Nansen’s speech travel dashboard, Jump Trading stands retired arsenic an entity with important withdrawal volumes from exchanges successful examination to their deposits. Leow presented a fig of imaginable reasons for Jump Trading’s token movements, noting the firm's vulnerability to liquidity hub Serum (SRM) tokens:

“Due to their vulnerability to the FTX fallout, they had to offload immoderate tokens retired of exchanges successful request of liquidity. In the past 7D, we’ve seen Jump Trading withdrawing ETH, BUSD, USDC, USDT, SNX, HFT, CHZ, CVX, and assorted different tokens from aggregate exchanges.”

A important magnitude of ETH has flowed retired of a fig of large exchanges implicit the past 7 days arsenic well. $829 cardinal worthy of ETH departed from Gemini, portion Upbit saw $797 millions of ETH moved from its account. $597 cardinal of ETH flowed retired of Coinbase portion Bitfinex besides saw astir $542 cardinal worthy of ETH withdrawn from its platform.

The past week besides saw a important magnitude of stablecoins moved disconnected exchanges. Stabelcoins worthy $294 cardinal flowed retired of Gemini, portion Bitfinex saw $173 cardinal moved disconnected its platform. KuCoin and Coinbase followed, with $138 cardinal and $108 cardinal of stablecoins withdrawn from the 2 exchanges respectively.

Leow besides unpacked successful connected the question of stablecoins, telling Cointelegraph that outflows typically bespeak users are connected the sidelines and superior is not flowing into the cryptocurrency space:

“Perhaps, the marketplace contagion and prolonged carnivore marketplace reduces the appetite for traders to beryllium actively investing and progressive successful the space.”

Nansen has played its portion successful delivering key insights into large ecosystem events successful 2022. The blockchain analytics steadfast delved into on-chain information to piece unneurotic the illness of Terra successful May 2022.

It past followed suit with a deep-dive into FTX’s collapse, with grounds suggesting collusion betwixt the speech and crypto trading steadfast Alameda Research. Both firms were created and controlled by Sam Bankman-Fried.