Try Quests to earn SOLOpen Analytics - 4. Ethereum
Questions:
Analyze what Alameda is experiencing. Rumors over the weekend began swirling that alameda research is on the brink of insolvency.
- Observe net in and outflows of USD tokens from known Alameda or FTX accounts throughout different chains.
- Are they going somewhere specifically?
- Are there any signs of potential insolvency?
What is Alameda Research?
Alameda Research is a quantitative cryptocurrency trading firm that provides liquidity in cryptocurrency and digital assets markets. It was founded in 2017 and is headquartered in Central and Western, Hong Kong.
What is the FTX exchange?
The FTX exchange was started by a group of successful crypto traders in 2019, with the mission of bringing more trading options and higher security to fellow traders. \n \n The platform initially specialised incrypto futures markets, where traders can create a contract, stipulating that they will buy or sell a certain amount of an asset, at a certain time in the future.
Another advantage is that users can trade with higher leverage, meaning that the potential profits are higher, but also potentially magnifying the losses.
Methodology:
This question asked us to find the USD outflow from FTX and Alameda and inflow to them.
First, I will state the limitations I set for solving the question.
- First, I considered only the inflow and outflow from two chains. Solana and Ethereum.
- The USD flow is including USDC, TUSD, DAI, BUSD, and USDT.
- Second, the analysis covered a recent month, from October 10, 2022.
For this purpose, I used the core.ez_token_transfers tables of Ethereum and Solana schemas. There are a lot of wallets regarding FTX and Alameda that I found from core.dim_labels tables of Ethereum and Solana schemas.
When a sender of transfer transactions is one of the FTX and Alameda wallets means the flow goes from FTX and vice versa, when the receiver is one of those wallets means the flow comes to FTX and Alameda.
- All charts show most of the inflow and outflow are in USDC. The next places are USDT and BUSD, respectively.
- The Netflow for all stablecoins is negative which shows the outflow volume is more than the inflow volume.
- Netflow of USDC is the most negative overall (-$668M), which can be dangerous for this coin.
- The number of transfers by USDC is more than all other stablecoins in both the inflow and outflow arrows. The second one is USDT. The rest is insignificant compared to these two and can be ignored.
- Seems some BUSD whales did special activity because the number of transfers by BUSD is much low compared to volume.
- The number of transfers comes to FTX is more than number of transactions goes out of it.
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The highest inflow and outflow from FTX and Alameda happen on Nov 7th. The volume on this date is around 3 times of the previous day.
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The cumulative Outflow from FTX is more than the inflow to it. The difference is around $1B.
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Netflow shows the difference between inflow and outflow (inflow - outflow). The left chart shows the cumulative Netflow per day. As you can see the Netflow is decreasing during the past month.
Until Oct 26th the Netflow was positive but after that till now is negative.
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The Netflow shows the health of an exchange. If the outflow is much more than the inflow means someone or some groups decrease the liquidity of that. This could hurt exchanges. In this case, we see the Netflow passed -$250M on Nov 1st which never happen before.
- The total number of USD transferred to FTX is more than goes out during the past month.
- Since Nov 7th the inflow decreased and the outflow increased.
- There is a spike in the number of USD transferred from FTX on Nov 7th which is around 2 times the previous day.
- All charts show most of the inflow came from Ethereum. Also, most of the outflow went to Ethereum too.
- The Netflow for both blockchains is negative which shows the outflow volume is more than the inflow volume.
- Netflow of Solana is the most negative overall (-$585M).
- The number of transfers from Solana to FTX is much more than Ethereum while the story change about the outflow from FTX to these two blockchains. The number of transfers between both blockchains is close together even Ethereum is a little higher.
- The number of transfers goes out of FTX is more than the number of transactions that come to it (for both blockchains).
- Binance is the first source for USD inflow to FTX with 54.6%.
- Coinbase is second source with 20.3%.
- The inflow comes to FTX form Binance increased recently and the volume on Nov 7th is twice the previous day.
- Binance is the first destination for USD outflow to FTX too with 64.1%.
- Coinbase is the second destination with 14.5%.
- The outflow comes to Binance from FTX increased recently.
Conclusion:
- The cumulative Outflow volume from FTX is more than the inflow to it. The difference is around $1B.
- the Netflow is decreasing during the past month. Until Oct 26th the Netflow was positive but after that till now is negative. If the Netflow was negative means someone or some groups decreased the liquidity of FTX and this could hurt that. In this case, the Netflow passed -$250M on Nov 1st and reached over -$1B which never happen before.
- The total number of stablecoins transfers to FTX is more than what goes out of that during the past month.
- Most of the inflow and outflow in and out of FTX is in USDC. The Netflow for all stablecoins is negative during the past month which shows the outflow volume is more than the inflow volume. In addition, Netflow of USDC is the most negative overall (-$668M), which can be dangerous for this coin.
- Seems some BUSD whales did special activity because the number of transfers by BUSD is much low compared to volume.
- Most of the inflow came from Ethereum compared to Solana. Also, most of the outflow went to Ethereum too. Also, the Netflow for both blockchains is negative which shows the outflow volume is more than the inflow volume.
- Binance is the first source for USD inflow to FTX with 54.6%. Binance is the first destination for USD outflow to FTX too with 64.1%.
