This article comes from Bankless, Original author: Ben Giove, compiled by Odaily translator Katie Koo.

This article comes from

, Original author: Ben Giove, compiled by Odaily translator Katie Koo.

This is one of the darkest days in the crypto space. FTX, the second largest centralized exchange led by SBF, is on the brink of collapse. FTX has been unable to meet the 1:1 withdrawal needs of users, and it is said that there is a gap of as much as 8-10 billion US dollars in customer deposits.

• It is unclear exactly how FTX lost such a large amount of money, but many have speculated that there was a close relationship between FTX and Alameda Research, a trading firm co-founded and owned by SBF.

• What the data on the chain tells us is also the tip of the iceberg. We reviewed a series of operations of FTX yesterday, combined with the current situation and data to gain an in-depth understanding of how things unfolded, the connection between Alameda and FTX, and the impact of the liquidity crisis on the DeFi world. There are three main questions:

• How much money has Alameda transferred to DeFi?

Which DeFi protocols have been hit the hardest?

FTX experienced a massive run as whale investors fled

Over the past week, FTX has seen over $8.7 billion in withdrawals, $7.7 billion in deposits, and a net outflow of $1 billion. Unsurprisingly, this was the largest of any exchange during this period.

Exchange inflows and outflows. Source: Nansen

While the panic started to set in after CZ tweeted about FTX on Nov. 6, the exchange started seeing significant outflows long before that.

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USDC balance in FTX hot wallet. Source: Nansen

We can also see an alarming rate of decline in the liquidity of stablecoins on exchanges. On Nov. 4, FTX wallets held $140.3 million in USDC, but by Nov. 6, that figure had dwindled to $3.1 million as the run began to take hold in full swing.

ETH held on FTX also dropped significantly following CZ’s tweet, with more than 358,000 ETH withdrawn from the platform between Nov. 5 and Nov. 7.

FTX's ETH balance. Source: Dune Analytics

The last to fall were non-ETH ERC20 tokens, which lost around $1 billion in value on the platform between Nov. 5 and Nov. 10. While some of this can be attributed to stablecoin outflows and falling prices, the fact that this balance appears to have declined more slowly suggests that FTX users are "fleeing to quality assets" as they withdraw larger, liquid assets first. assets, and then into smaller, less liquid assets.

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FTX's ERC-20 token balance. Source: Dune Analytics

For example, a wallet named 0xbe385b59931c7fc144420f6c707027d4c2d37a81 withdrew $269 million in USDC and USDT from FTX between November 6-8.

It is not yet known who owns this wallet, but we can glean some clues by looking at its connections to other addresses.

Transaction between wallet A and wallet B. Source: Nansen

Since creation, the wallet (let's call it wallet A) has received 11008 ETH from another address: 0x0d71587c83a28e1adb9cf61450a2261abbe33632 (wallet B).

Wallet B trades with Genesis OTC. Source: Nansen

B also has an equally interesting transaction record. Since its creation, it has received 857,860 ETH from Genesis off-market, while sending 507,785 ETH to Three Arrows Capital.

Transaction between wallet A and wallet C. Source: Nansen

A also sent 9319 ETH to another wallet 0x3cad0dac0800808385af3490c058ad5bc9ef563e (Wallet C). Wallet C itself has an excellent interaction record, and then it received 33,289 ETH from Mirana Ventures (the early investment arm of centralized exchange ByBit).

Transaction between Wallet C and Mirana Ventures. Source: Nansen

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Wallet C trades with Genesis OTC. Source: Nansen

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Alameda plugs FTX funding loophole

Although, as previously stated, Alameda withdrew tens of millions of dollars from FTX between October 25th and November 4th, between November 5th and 7th, Alameda deposited over $360.9 million in USDC and BUSD FTX.

This appears to confirm the claim that FTX is intermingling with Alameda funds, as none of the participants seeking to preserve capital would have deposited funds with a financial institution that was experiencing a run. Alameda appears to have tried, but failed to plug FTX's seemingly huge hole.

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Alameda still holds about $50.9 million in tokens and $12 million in on-chain undercollateralized debt

Despite speculation that the company will go bankrupt following the collapse of FTX and the drop in the price of FTT (which the company uses as collateral for loans), Alameda still appears to hold millions of tokens on-chain.

Among projects not directly associated with FTX or Alameda, the largest positions are xSUSHI and LDO, which collectively hold $5.8 million worth of tokens. Given its volatile state, it seems likely that Alameda will liquidate their positions in each of these tokens.

Considering that they are very active in DeFi, Alameda’s exposure also revealed that the company also has approximately $12.8 million in outstanding debt on Clearpool and TrueFi, two mortgage lending platforms.

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Alameda has been a "regular" of these products since they used to have their own pool at Maple Finance, the largest mortgage lending platform in DeFi. Thankfully, this pool has been deprecated.

Also, it's worth noting that the $5.5 million loan to Alameda through Clearpool was made through a licensed pool, with Apollo Capital and Compound Credit Partners firms as the sole lenders.

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MIM, USDT, stETH under pressure

Alameda is the main user of Abracadabra and they use FTT as collateral to mint MIM. Abracabdra's exposure to FTX and FTT is significant, as on November 3, more than 35% of the outstanding MIM supply was backed by FTT. This has resulted in DeFi users reducing their exposure to stablecoins when FTX and Alameda’s have problems.

MIM's largest source of liquidity, the MIM-3crv pool on Curve, became severely unbalanced. As of this writing, the pool is only 13.8% 3CRV and 86.2% MIM, not the ideal 50/50 split.

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This loss of liquidity caused MIM to de-peg significantly, falling as low as $0.93 before being re-pegged to the US dollar.

This rapid rebound is likely due to the nature of CDP (Collateralized Debt Position) based stablecoins, as Alameda is incentivized to buy cheap MIM, creating demand for it in order to pay off their entire debt. MIM also benefits from a very high A-factor on Curve, which allows it to maintain its peg to the US dollar even when the pool is heavily unbalanced.

MIM/USDC price. Source: Parsec

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3Pool composition. Source: Parsec

The 3Pool (DAI/USDC/USDT) on Curve is also obviously unbalanced, with the proportions of DAI, USDC and USDT being 15.2%, 15.3% and 69.4% respectively, instead of the ideal third.

This suggests that liquidity providers, fearful of USDT exposure, are “fleeing” by withdrawing USDC and DAI from their pools.

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These Curve pool imbalances point to massive fear in the market, especially with Alameda-related stablecoins with confirmed or suspected exposure. Investors are likely to keep an eye on their asset composition in the days and weeks ahead, as a rebalancing of these asset pools could be a sign that the panic in the market has subsided.

Summarize

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Summarize

The transparency of the blockchain has allowed us to gain access to a wealth of analysis on the impact of FTX’s crash, of which we are only scratching the surface in this article.

As we have seen, funds flowed between FTX and Alameda before and during the run on the exchange, convincing people that the two entities are more closely related than anyone imagined. We also learned that being a very large entity (FTX) was able to withdraw hundreds of millions of dollars in stablecoins during the run, recovering some or all of the funds. We can also see that Alameda still has over $50 million in tokens at risk of being dumped into the market, and over $12 million in outstanding loans that appear to be at high risk of default.