Thread by @alvinfoo

This is an interesting in-depth analysis using on-chain data to piece together the fallen dominos of #FTX and #Alameda compiled by @nansen_ai :

Here are their key takeaways :

Via nansen.ai/research/block…

1. FTX and Alameda have had close (on-chain) ties since the very beginning.

2. FTX created FTX Token (FTT), a token for their platform, involving Alameda since day one. The two of them shared the majority of the total FTT supply which did not really enter into circulation.

3. The initial success of Alameda, FTX, and the meteoric rise of FTT most likely led to a rise in the value of Alameda’s balance sheet. This high balance sheet value of the FTT positions was likely used as collateral by Alameda to borrow against.

If the borrowed funds were used to make illiquid investments, FTT would become a central weakness for Alameda.

4. With the collapse of Terra/UST in May, a liquidity crunch ensued as many creditors started to call back loans following the 3AC & Celsius crashes. Alameda would have needed liquidity from a source that would still be willing to give out a loan against their existing collateral

5. Alameda deposited around ~$3b worth of FTT on FTX of which most remained there until the end

6. Evidence of the actual loan from FTX to Alameda is not directly visible on-chain, possibly due to the inherent nature of CEXs which may have obfuscated clear on-chain traces.

7. Based on the data, the total $4b FTT outflows from Alameda to FTX in June & July could possibly have been the provision of parts of the collateral that was used to secure the loans (worth at least $4b) in May / June that was revealed by several people close to #SBF

8. While it was known that Alameda and FTX were both founded by SBF & Co., the Coindesk report had exposed concerns regarding Alameda’s balance sheet. The majority of net equity in Alameda’s business had consisted of FTX’s own centrally controlled token, FTT

9. The back-and-forth battle between the CEOs of Binance and FTX caused a ripple effect on market participants, Binance owned a large FTT position.

nansen.ai/research/block…