Tellor’s 13-Hour Meteoric Rise and Fall Raises Manipulation Suspicions

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Fredrik Vold

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Fredrik Vold

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January 2, 2024

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A small-cap altcoin known as Tellor (TRB) experienced a 150% surge to a new all-time high above $600, only to witness a crash that erased all the gains within just hours on December 31, sparking suspicions of price manipulation.

Citing blockchain data from Etherscan, the on-chain analysts behind the X account Lookonchain said the Tellor team transferred 4,211 TRB, valued at approximately $2.4 million during the surge, to a wallet labelled as belonging to Coinbase at around 8:41 pm UTC.

The timing aligned almost perfectly with the high during the price pump, adding to suspicions of market manipulation.

In the past 24 hours, $TRB soared to $600 and then plummeted to $137, causing $68M of assets to be liquidated, making it the most liquidated token.

We noticed that the #Tellor team deposited 4,211 $TRB($2.4M) after the price of $TRB skyrocketed.

Address:https://t.co/efHPXCiMiG pic.twitter.com/IBty2Wf2gI

— Lookonchain (@lookonchain) January 1, 2024

The sudden drop in Tellor’s price resulted in over $68 million in liquidations, according to CoinGlass data cited by Lookonchain on January 1.

Concentrated TRB supply

On-chain analytics firm Spot on Chain also noted on X that 26% of the circulating supply of TRB was held by just 20 large wallets.

According to the firm, these wallets accumulated the token at a price of around $15, and the price has since then risen by around 15x.

“Over the past two months, the whales have slowly deposited their tokens onto exchanges, creating a pump-and-dump cycle to liquidate their holdings,” the post added.

🚨🚨 $TRB reached its all-time high today at $225, but what's next?

Current situation:

➡️ Among the 2.5M $TRB in circulation, about 1.7M is on exchanges, and 660K is held by a group of 20 whales (which is ~95% of the tokens).

➡️ The group of whales accumulated these tokens in… pic.twitter.com/kWbZGxEqcv

— Spot On Chain (@spotonchain) December 29, 2023

Synthetix users face losses

According to blockchain protocol Synthetix founder Kain Warwick, the large price moves in TRB led to around $2 million in losses for holders of his protocol’s native SNX token.

The losses were due to the sudden change in open interest and price of the TRB token which was not properly reflected in Synthetix’s decentralized derivatives markets.

“Several short positions were opened as the price spiked today and with the dislocation of spot and perp prices there was no [arbitrage] to balance it,” Warwick wrote.

What happened? TRB had a 250k USD open interest cap that ballooned to 12.5m as the price ran up the last few months. This should have been adjusted back down, but risk controls were lax, there was diffusion of responsibility. The Spartan Council is responsible for params though.

— kain 🍊 (@kaiynne) January 1, 2024

Tellor is a decentralized oracle protocol, and TRB serves as the protocol’s utility and governance token.

TRB is traded on several major exchanges, including Binance, OKX and Coinbase, with Binance responsible for close to half of the trading volume in the part 24 hours.

The team behind Tellor has so far not issued any statements regarding the unusual price movements in TRB.