Dramatic TRB Price Surge and Drop Sparks Market Manipulation Allegations
Summary:
Tellor (TRB), a somewhat under-the-radar cryptocurrency, experienced a dramatic surge and subsequent fall in price, leading to allegations of market manipulation. Close to 95% of circulating TRB was held by a mere 20 wallet holders, causing price volatility. The abrupt drop in TRB value resulted in over $68 million in liquidations. This situation negatively impacted decentralized perpetual trading protocols such as Synthetix (SNX) and Hyperliquid, causing considerable losses for SNX stakeholders in particular. Synthetix founder, Kain Warwick, attributed this to insufficient risk controls within the protocol.
Tellor (TRB), a somewhat obscure cryptocurrency, experienced a stark rise and subsequently fell just as sharply on Dec. 31, casting a spotlight on the altcoin. The price of TRB rocketed approximately 150% in just 13 hours, hitting an all-time high of $619 before plunging back to $136. This volatile movement led to accusations of market manipulation. Etherscan data lent further weight to these allegations, revealing that the Tellor team had transferred approximately $2.4 million worth of TRB to a Coinbase wallet around the time of the price surge. The abrupt depreciation of the Tellor token reportedly triggered over $68 million in liquidations, according to CoinGlass data referenced in a Jan. 1 Lookonchain post on X (formerly Twitter).
Spot on Chain, a blockchain analytics service, suggested that this volatility could also result from the fact that roughly 95% of existing TRB tokens are held by 20 major wallet holders, or 'whales'. These whales have been accumulating TRB tokens, initially buying at prices as low as $15 and slowly depositing their holdings into centralized exchanges along the fluctuating price trajectory to maximize profits, as indicated by Spot on Chain.
No response was received upon contacting Tellor for a comment. The company's TRB token is used within a decentralized oracle network similar to Chainlink (LINK), providing price data to smart contract operations on blockchain networks. Several decentralized perpetual trading protocols such as Synthetix (SNX) and Hyperliquid took a hit following the sharp price correction, and SNX stakeholders, in particular, suffered losses in the millions.
In a Jan. 1 post, Synthetix founder Kain Warwick explained that poor risk control measures led to approximately $2 million in losses, with the protocol’s automated risk parameters failing to detect the allegedly manipulated, abnormal price activity of TRB. According to Warwick, TRB's open interest cap of $250,000 had inflated to $12.5 million due to lax risk controls and a lack of responsibility, allowing traders to place large wagers on decentralized derivative contracts. Warwick concluded that risk management must be essential to decentralized perpetual exchanges such as Synthetix to prevent future incidents.
Published At
1/2/2024 7:02:48 AM
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