As the dust settles after the collapse of the Terra ecosystem, blockchain analytics firm nansen_ai notes two major takeaways. (Reporting via gazza_jenks)
. The who and why seemed a mystery but the outcome was catastrophic, with UST dropping well below $1 while the value of Terra’s stablecoin token plummeted in value as a result.
It is worth noting that the report does not include potential off-chain events that could have exacerbated the situation, impact on investors, breakdown of net losses between wallets, and what happened to Bitcoin reserves backing UST.The first and biggest takeaway was Nansen’s identification of a small set of addresses or players that identified vulnerabilities in the Terra ecosystem.
Massive amounts of UST were then swapped with various stablecoins in Curve’s liquidity pools. Nansen then speculated that during the depegging process, some of the identified wallets exploited discrepancies between pricing sources on Curve as well as decentralized and centralized exchanges by taking buying and selling positions across exchanges.Seven wallets central to UST’s depeg
The firm reviewed social media and forum threads to narrow down that particular time frame, highlighting a prominent transaction flow on Curve liquidity pools, which led to its three-phase analytical approach.
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