A market intelligence firm says seven crypto wallets may have been involved in the depegging of algorithmic stablecoin TerraUSD (UST) from the US dollar.
According to digital assets insights firm Nansen, seven crypto wallets were spotted swapping large amounts of UST on the automated market-making platform Curve (CRV) on May 7th, right before the stablecoin and its issuer Terra (LUNA) saw staggering losses.
“Seven ‘initiating’ wallets swapped significant amounts of UST vs. other stablecoins on Curve as early as the night of May 7th. These seven wallets had withdrawn sizable amounts of UST from the Anchor protocol on May 7th and before (as early as April) and bridged UST to the Ethereum blockchain via Wormhole.
Out of these seven wallets, six interacted with centralized exchanges to send more UST (supposedly for selling) or, for a subset of these, to send USD Coin (USDC) that had been swapped from Curve’s liquidity pools.”
Nansen notes the wallets were likely exploiting price vulnerabilities between centralized and decentralized crypto exchange platforms, which could have caused UST’s depeg, rather than one lone hacker launching an attack to destabilize the algorithmic stablecoin.
“During the depegging process, [the wallets were] likely arbitraging inefficiencies between various pricing sources (Curve, decentralized exchanges, and centralized exchanges) by buying and selling positions between centralized and decentralized markets.
As such, we refute the popular narrative of one ‘attacker’ or ‘hacker’ working to destabilize UST.
The depeg of UST could instead have resulted from the investment decisions of several well-funded entities, e.g. to abide by risk management constraints or alternatively to reduce UST allocations deposited into Anchor in the context of turbulent macroeconomic and market conditions.”
Follow us on X, Facebook and TelegramDon't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/is.a.bella
