Have you ever worried about the three invisible bombs in the encryption market?

This is the third installment of the Blockbeats' 'are you?' series, which explores some of the concerns that have haunted investors throughout the evolution of the cryptographic market. The truth of the cryptographic market is never single. Investors familiar with cryptographic rules know that sometimes bitcoin goes up or down so fast that nothing can be found, bull or bear or heaven or hell can happen in a flash.

Previous review:"Are you thinking about buying bitcoin at the bottom?","Are you also scolding sun yuchen and trading platform?"

The us stock futures circuit breaker, the Middle East stock market circuit breaker, the opening price of oil plunged by 30%, the currency of oil-producing countries was devalued, some time ago, the community in a variety of "water is more expensive than oil" joke, faintly revealed the helplessness of investors. Against this backdrop, bitcoin, once considered a great haven, has not been immune.

For days on end, the magnitude of the daily fluctuations in the price of bitcoin was astonishing, and even more so. On March 8 and 9, the price of bitcoin dropped from $8,700 to $8,000, which was the beginning of the beginning. Then on March 12 and 13, the price of bitcoin dropped all the way to a low of $3,800.

The gloom is still spreading in the cryptographic markets, where investors have long been swayed by talk of halving their bets and of safe-haven assets. For them, to go, or to stay? What's next for the cryptocurrency market?

Last month, BlockBeats wrote that the cryptographic market was about to explode into a death spiral because of falling token prices and various cryptographic derivatives. Today, the downward trend has not stopped, it is still too early to declare the death of bitcoin, the interests of intertwined mining machine manufacturers, mining pools, trading platforms and other major players on the bitcoin industry chain, will virtually support bitcoin; Investors also need bitcoin.

Just because it won't die doesn't mean it won't fall, and the psychological price of bitcoin has been falling for many in the midst of a frenzy of panic among investors. In addition to the lack of confidence, cut meat stop loss and other factors, as an insider you, is also worried about the encryption market may exist in the following three invisible "bombs"?

Large holders of currency "crash the market"

In June last year, PlusToken, a capital dish project under the banner of blockchain, broke the news that it had run away. This fund dish project with a scale of 2 billion dollars (including 18/200,000 bitcoins), although some members have been arrested, a large number of encrypted assets are still missing. This money became hidden in the encryption market in the timing of the "bomb", its transfer or sell off, it is also the operators of the encryption market to blame for the collapse of the explicit reasons.

Nearly 200000 gold COINS quantity many, currently publicly available in more than 10000 pieces of not less than 200 trading platform address, except in the hearing (guess owns about 1 million), the FBI (140000 m), the twin brothers (supposedly hold about 120000) is a recognized individuals hold a lot of COINS, the huge amount of COINS, is in the hands of just want to cash out of the team, have to worry.

"PlusToken" was most popular in December. At that time, when bitcoin fell and ethereum hit a record low, some analysts said that the reason for the market crash was that Plustoken transferred and broke up ethereum, which was worth more than $100 million, causing investors to flee in panic.

In the last two months, a total of more than 25,000 bitcoins from monitored addresses have moved again, sparking speculation that the timing coincided with the collapse of the cryptocurrency. However, according to the analysis of lian an, the reason for the drop in the price of the currency is relatively weak with PlusToken, because this asset is "currently in the stage of small bitcoin confusion after the split". And there is no hard evidence that PlusToken's sell-off had a direct impact on the market.

In order to hide people's eyes and ears, more than 100,000 bitcoins have been frequently mixed, and the team slyly broke them into parts. The whole process lasted for half a year, during which PlusToken was "smashed" for many times.

How long will PlusToken stay on the plate? Last November, Ergo, an encryption analyst, said that at that time, there were about 60,000 unmixed bitcoins left in the PlusToken related address. After the subsequent three months of splitting, it seems that there are not many PlusToken COINS left that have not been transferred or mixed, only about 1/6. The asset transfer that has lasted for the better part of a year is coming to an end, isn't it?

MT.Gox in the air for 6 years

If PlusToken is a hangover from the run of money, most of the bitcoins found on the mentougou trading platform, which went bankrupt in February 2014, are still sitting quietly in a cold wallet.

According to track the incident cryptoground web site for a long time, at present, all have erratically vallely cold wallet address and after the forking over more than 16 COINS, as well as the same amount of BCH (currently worth more than $1.3 billion), since the court released the investigation report in Tokyo, Japan in March last year, disclose the creditors and compensation plan, since the volume of assets, how to pay, is still pending.

Source: cryptoground&cake;

To pay cash, the trust would have to sell bitcoins, which could affect markets and investors either way. The concern is not unfounded after investors panicked and blamed Nobuaki Kobayashi, a trust controller, for selling 35,800 bitcoins between December 2017 and February 2018 without warning.

Although the gateway has gradually disappeared in the long river of encryption, but as long as the investor compensation plan is not clear and implemented, these huge assets in the hands of trust funds, are a dangerous signal. In October, mentougou said in a statement that the Tokyo district court had issued an order allowing the trustee to file a rehabilitation plan for an extension until March 31, 2020. This means that if all goes well, the long-dormant whale will soon wake up and disappear.

Systemic risk of DeFi

Before that, we asked in "can the death spiral of bitcoin really happen?" As mentioned in the article, all kinds of loans and leverage tools launched in the centralized institutions bring investment boom, with the accompanying risk of being ignored: once the market falls unilaterally and the repayment party cannot repay, the mortgage tokens can only be liquidated, which may eventually lead to systematic "stampede".
In DEX and other emerging trading markets, all kinds of financial playing methods are not uncommon, and risks also breed quietly. At one point in February, the total value of assets locked up in the entire Defi ecosystem was more than $1 billion, according to Defi Pulse, and that figure is now down to $560 million.

DeFi mortgage assets hit an all-time high in February. & have spent

Of all DeFi applications, the main lending and trading applications are again the majority, and DeFi is also inevitable for the potential systemic risk of centralized institutions. The previous day, Compound liquidated more than $2.5 million worth of collateral due to ethereum's price collapse, the highest since v2 was launched last year, while MakerDAO and dYdX also saw liquidation peaks. Fortunately, such a situation is not yet crippling to DeFi ecology.

But soon something worse happened. Ethereum's collapse on March 12 and 13 triggered massive clearing by DeFi's lending platform, which exceeded $30 million in two days. MakerDAO announced an auction of MKR on March 13 to pay off more than $4 million in bad loans. The day before, MakerDAO's predictive pricing system had been suspended for a while because of congestion on the ethereum network and high Gas fees.

DeFi's problems are exposed to a short period of extremely rapid market declines: late feedings, late liquidations, liquidity drying up... This led to the collapse of many users' accumulated confidence in the DeFi protocol.

After more than two years of development, the DeFi ecology, which mainly consists of MakerDAO, Synthetix and Compound, has become increasingly prosperous. Quite a few DeFi "legos" are either for liquidity or development considerations, with layers of protocols stacked and multiple application assets closely dependent. For example, open CDP directly on the Maker, import Compound InstaDapp, and become more and more project factors such as DAI, etc. These seemingly ingenious practices, on the one hand, reduce the threshold for latecomers to enter the decentralized finance, but the risks involved should not be underestimated.

Under extreme market, such as 12 evening prices falling speed, DeFi affected most obviously in the ecological Synthetix, Uniswap, Augur type of DEX, in just one day, these projects to the mortgage value about 40% of the etheric fang, on the other hand, the DeFi system has once again exposed the prophecy machine problem such as delay and etheric fang performance limits.

Source: skew&cake; & have spent

Peak, mortgage mortgage assets and PlusToken events involved in the DeFi currency amount, celebrating the DeFi grow at the same time, if there is a similar machine attacks causing prices to deceive, or loopholes malicious hackers with governance change interest rates, mortgage rates, such as the core data, and even the etheric fang slump in a short time and the network of malicious denial-of-service attack, or such as Rollup, Plasma holes used in extreme cases, such as DeFi then build on it, is likely to encounter a serial type.

In the past, when we were looking for reasons to affect the volatility of the encryption market, we always attributed it to the selling of orca, or accidents, either intentionally or unintentionally. With the mentougouou incident gradually clear and the end of the PlusToken team ant moving type of asset transfer, the doubts added in both may soon disappear.

As for the systemic collapse of the entire cryptographic market or DeFi ecosystem, although this is a sword hanging over the heads of DeFi participants, there is no sign of it coming any time soon, and DeFi ecology is far more resilient than many imagine. And in this huge encryption market after the big wave, I believe that many entrepreneurs will improve the protocol and perfect.

Finally, I hope everyone still has confidence in the blockchain and cryptocurrency industry. Recently the encryption market is unpredictable, please pay attention to the risk, careful operation.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia