{"id":453643,"date":"2022-05-27T14:04:37","date_gmt":"2022-05-27T11:04:37","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/two-key-takeaways-from-nansens-ust-stablecoin-depeg-report\/"},"modified":"2022-05-27T14:04:37","modified_gmt":"2022-05-27T11:04:37","slug":"two-key-takeaways-from-nansens-ust-stablecoin-depeg-report","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/two-key-takeaways-from-nansens-ust-stablecoin-depeg-report\/","title":{"rendered":"# Two key takeaways from Nansen\u2019s UST stablecoin depeg report"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25720f067b1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25720f067b1\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/two-key-takeaways-from-nansens-ust-stablecoin-depeg-report\/#%E2%80%9D_Two_key_takeaways_from_Nansens_UST_stablecoin_depeg_report_%E2%80%9C\" >&#8221; Two key takeaways from Nansen\u2019s UST stablecoin depeg report &#8220;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/two-key-takeaways-from-nansens-ust-stablecoin-depeg-report\/#Attackers_preyed_on_shallow_Curve_liquidity_to_exploit_arbitrage_opportunities\" >Attackers preyed on shallow Curve liquidity to exploit arbitrage opportunities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/two-key-takeaways-from-nansens-ust-stablecoin-depeg-report\/#Seven_wallets_central_to_USTs_depeg\" >Seven wallets central to UST\u2019s depeg<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Two_key_takeaways_from_Nansens_UST_stablecoin_depeg_report_%E2%80%9C\"><\/span>&#8221; Two key takeaways from Nansen\u2019s UST stablecoin depeg report &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvOGM1ZTRhNjMtZDc0YS00N2UyLWFjYjgtNzk1N2FiOTY1OWYwLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>As the dust settles on the cataclysmic collapse of the Terra ecosystem, an on-chain deep-dive carried out by blockchain analytics firm Nansen highlights two major takeaways.<\/p>\n<p>The cryptocurrency ecosystem was awash with varying speculatory theories around the cause of Terra\u2019s algorithmic stablecoin UST\u2019s decoupling from its $1 peg. The who and why seemed a mystery but the outcome was catastrophic, with UST dropping well below $1 while the value of Terra\u2019s stablecoin token plummeting in value as a result.<\/p>\n<p>Nansen undertook an investigation leveraging on-chain data from the Terra ecosystem to the Ethereum blockchain in an effort to chart the chain of events that led to the UST depeg.\u00a0<\/p>\n<p><iframe loading=\"lazy\" title=\"How the collapse of Terra&#039;s UST will impact the future of stablecoins | Interview\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/IbVp78QDO3s?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>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 h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened to Bitcoin (BTC) reserves backing UST.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Attackers_preyed_on_shallow_Curve_liquidity_to_exploit_arbitrage_opportunities\"><\/span>Attackers preyed on shallow Curve liquidity to exploit arbitrage opportunities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The first and biggest takeaway was Nansen\u2019s identification of a small set of addresses or players that identified vulnerabilities in the Terra ecosystem. These actors preyed on the relatively shallow liquidity of Curve pools backing the TerraUSD (UST) peg to other stablecoin and moved to capitalize on arbitrage opportunities.<\/p>\n<p>The report outlines how these actors withdrew UST funds from the Anchor protocol on Terra. These funds were then bridged from Terra to Ethereum making use of the Wormhole infrastructure.<\/p>\n<p>Massive amounts of UST were then swapped with various stablecoins in Curve\u2019s 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.<\/p>\n<p>Nansen\u2019s report refuted a speculative narrative that a single attacker or hacker worked to destabilize UST. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Seven_wallets_central_to_USTs_depeg\"><\/span>Seven wallets central to UST\u2019s depeg<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Nansen blockchain analysis adopted a grounded theory approach that identified relevant transaction volume data between May 7 and 11 &#8211; the timeframe in which UST lost its $1 peg. <\/p>\n<p>The firm reviewed <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social media<\/a> and forum threads to narrow down that particular time frame, highlighting prominent transaction flow on Curve liquidity pools &#8211; which led to its three-phase analytical approach.<\/p>\n<p>Phase one involved analysis of transactions in and out of the Curve lending protocol, which allowed Nansen to compile a list of wallets whose activities suggest a significant impact on the UST depegging.<\/p>\n<p>Phase two was slightly more complicated, as Nansen observed transactions across the Wormhole bridge that may have influenced the depeg event. The firm reviewed outflows of UST from the Anchor protocol involving a narrowed-down list of wallets. This was followed by investigating the sale of UST and USDC on centralized exchanges. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Exchanges back \u2018Terra 2.0 revival plan\u2019 via airdrops, listing, buyback and burning<\/em><\/strong><\/p>\n<p>The final phase involved triangulating on-chain evidence to form a narrative of the events around the UST depeg. A list of seven wallets was then highlighted that are believed to have been central in the Terra ecosystem collapse.<\/p>\n<p>The Nansen report provides some interesting insights driven by blockchain analytics. The core \u2018why\u2019 remains a mystery though &#8211; with the firm opting not to speculate on the potential objectives or motivations behind the seven main addresses that played a major role in triggering the depeg of the UST algorithmic stablecoin.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/two-key-takeaways-from-nansen-s-ust-stablecoin-depeg-report\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Two key takeaways from Nansen\u2019s UST stablecoin depeg report &#8220; As the dust settles on the cataclysmic collapse of the Terra ecosystem, an on-chain deep-dive carried out by blockchain analytics firm Nansen highlights two major takeaways. The cryptocurrency ecosystem was awash with varying speculatory theories around the cause of Terra\u2019s algorithmic stablecoin UST\u2019s decoupling&#8230;<\/p>\n","protected":false},"author":1,"featured_media":453644,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvOGM1ZTRhNjMtZDc0YS00N2UyLWFjYjgtNzk1N2FiOTY1OWYwLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74894,74863,75493,122378,117],"class_list":["post-453643","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-blockchain","tag-cryptocurrencies","tag-stablecoin","tag-terra","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=453643"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453643\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/453644"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=453643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=453643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=453643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}