The FTX Saga | Dune Arcana #6 | How to track on-chain balance and volume with open data

This week, we discuss the whole FTX saga -- a timeline for the series of events pertaining to SBF, FTX, Alameda Research, CZ, Binance, and more. Using the FTX saga as our case study, we will go over how to track on-chain activities/flows, balances, and volumes in an open data blockchain environment.


Jackie  0:01  

Hello. Hello, what's up, everyone? Welcome to our Dune Arcana #6. So, in Dune Arcana, we will talk about Web3 news and trends through an ongoing data angle. And today's topic is FTX soccer. 

My name is Jackie (agaperste), and along with me today is our OG community member, Boxer. And our featured guest today is Tom from 21Shares. Do you wanna introduce yourself, Tom?

Tom  0:35  

Right, thank you very much for having me. So, my name is Tom, and I'm a research analyst at 21Shares. A bit of background about what 21Shares does. 

So, 21Shares is currently the world's largest ETP issuer in terms of the number of products that we have. It’s around 40 crypto products across different prestigious exchanges, and we have roughly around 1 billion AUM in total. 

And our mission, or what we're trying to do, is to provide better accessibility for the wider audience to have better accessibility to crypto exposure. With that being said, I think one fun fact about our company is that 100% of our assets are collateralized. 

We have segregated our assets from our balance sheets, which is different from some of the entities we're discussing today. 

And that's why we're having this topic today with Jackie and Boxer. And once again, thank you for having me here. We were glad to be hosting this session with you guys. And back to you, Jackie.

Jackie  1:41  

Thanks, Tom. Thank you for being here today. All right. So without further ado, let's dive into the wild saga that has been happening for the past few weeks.

Boxer  1:53  

We'll disappear for a second. And we'll come back in at a later time. Bye. Bye.

Jackie  1:58  

Bye. Okay, so, right. If you weren’t on Crypto Twitter until like two weeks ago when you saw everything blew up, you might be super confused about these letters, right? FTX FTT SBF? And CZ UPnP…like what are all these? 

So, let's just get the ABCs of the whole situation and get the vocabulary down. Okay, so SBF, stands for Sam Venkman Fried. 

So, he is the founder of Alameda Research — and also later on when Tom founded the FTX — the crypto centralized exchange. Alameda Research is a proprietary trading firm. 

FTX is one of the leading crypto centralized exchanges up until a few…two weeks ago. So SBF is a majority shareholder in Alameda Research. 

And then, he was also the CEO up until the 11th of November when last week sometime he announced that he’ll step down. So, that is all about the FBR, SBF, and FTX. 

Okay, so on the other side, we've got CZ Binance, right? So, CZ is the co-founder and the CEO of Binance goes by CZ. Binance is basically the largest centralized exchange and then FTX and Binance are competitors but also Binance is an early investor in FTS. 

Okay, so tokens…FTT is the native token for FTX. And B&B is the native token for finance. So, they're not exactly like the stock tickers, but they're equivalent. A B&B is really tied to finance, and FTD is really tight with FTX. 

Okay, cool. So, we got the ABCs down. Now let's kind of go through a timeline of exactly what happened, so we can get the contacts before we dive into the data side. Okay, so just a quick note, all of these times I'm noting here are Eastern Time Zone. 

So, the relevant starting point is on November 2 at 4:04 am. Coin desk came out with a report that said a significant portion of Almeida Research’s assets — so $5.8 billion out of $14.6 billion — were tied to FTX/FTT total. 

Also, on wonder-like books, there's also a substantial amount of Solana tokens, so that is November 2 on Almeida Research’s spell sheet. We saw some of it. 

Okay, so fast forward to November 6 at 10:47 am, the buyer, Nancy Pelosi, announced that Binance would liquidate any remaining FTT token on their books. 

And this is in light of the recent news. So, one of them was part of Binance’s exit from FTT equity last year. So, they had to remember that Binance was an early investor in FTX. 

So, as a result, they had a large chunk of FTT token, but then (due to the recent revelation that has come to light) they decided to liquidate any remaining FTT on their books. 

Also, a bit of background you probably heard about that SBF, Sam Bankman Fried was lobbying pretty heavily in DC for crypto regulations. And that had not been received very well by the crypto community. So, in addition to the news of like, Alameda Research is like a balance sheet. 

Just keep in mind the fact that Sam had been advocating for some not-super-popular crypto regulation in DC. Yeah, so that's what happened on November 6 and not even an hour later….like 30-some minutes later…the CEO of Alameda Research, Keralite, responded to Susie's tweet saying they would buy all the FTT tokens at a price point of $22. 

Okay, so then afterward, CZ came out and confirmed a transfer of 23 million FTG tokens to a biogenesis known addresses on November 5. 

He first announced, “Okay, we're gonna try to liquidate.” Then, he basically comes out further to say they're already in position to basically dump the token that they have (the FTD token). Or later on, we can see this happening on-chain. 

Okay, so then fast forward a few hours to 7:20 pm on November 6. A lot of people on Crypto Twitter started reporting a large amount of stable point outflow from FTX was happening. And then we can see an inflow from Alameda to FTX also happening. 

So, that is on the 6th, and then let's fast forward a little bit to the 8th. A lot of crazy things happen between the 6th and 7th, right? People start panicking. They're like, “Okay, is this bank around? What's happening?” 

They don't feel safe. They want to withdraw their funds. And then on the 8th, FTX stopped processing withdrawals. And then at 11:09, Binance came out and said that they have signed a non-binding Letter of Intent to acquire FTX to help cover the liquidity crunch. 

So, that's that. A few hours later, CZ — the Binance CEO — comes out and made a comment about the situation. He said banks should run on a fractional reserve, but crypto exchanges should not. He started out advocating for proof of reserve soon and then said that Binance will do that soon for full transparency. 

Okay, so that is on November 8. And then, fast forward to November 9, right? There was a letter of intent on the 8th saying Binance might acquire FTX on the 9th at 4 pm Eastern Time. 

Binance basically said that they are withdrawing from this deal. They're gonna walk away from this acquisition of FTX after conducting due diligence. So, that is pretty unfortunate. 

And then that's November knife. And then quickly after, we start seeing Crypto Twitter saying that the liquidity shortfall of FTX could be up to like $8 billion or even $10 billion. A ll right and then fast forward to November 11. 

Tonight, FTX and Alameda Research came out and said that they have filed for bankruptcy. Apologies, I think…oh, the suite is unavailable. 

Okay, well, on the 11th they came out and said that they're gonna file for bankruptcy. 

They filed for Chapter 11 on November 11th. So yeah, that is a quick timeline. Starting from the second when there's a report about a possible interaction, there are a bunch of FTT tokens on Alamitos balance sheet, right?

To see it coming out saying that they're gonna liquidate all the FTT tokens that they have to basically like a letter a week, we see a lot of withdrawal that happened on FTX. 

I let it return, saying that Binance might acquire FTX. Basically, Binance is walking away from the deal and then eventually had to declare bankruptcy. Yeah, so that is the context of what we're going to investigate today with on-chain data. 

So, let's go into the dashboard of things. Just like a quick word on this. So, today for the message aside, we're going to focus on the Ethereum chain, and we're focusing on the ether and ERC 20 tokens. 

But you're definitely encouraged the session to look at questioning activities, as well as NFT activities for FTX and Alameda. So, our goal here today is to teach you how to track ongoing activities like the balances the flows so that you are equipped to basically — when you read news, when you hear something — you're able to investigate the truth for yourself. 

Okay, cool. So, let's begin with entity addresses, right. When we say that we want to look into auditing activity for FTX and Alameda, naturally, something we have to do is to know what addresses we're looking at. Right? 

So, thanks to Larry, we actually have a list of known addresses for FTX and Alameda Research and Binance. And then, the way you can do it on Dune, we have this dataset called labels. 

Okay, so we have this dataset called labels, and you can just put the entity that you want to search and get the addresses associated with it. 

The status that lives within spells and that you can type for label. And then you can go into labels, and there's like different sets of labels, and then you can call for all the labels in the table. 

But yeah, so here is how we can get a hold of the known addresses for FTX and Alameda for our later investigation. 

And then if you not for FTX or Alameda, but for any other things down the road that you want to…these entity addresses and that you want to share with the community, you can add it to our spa. 

And then here, we've linked a few helpful links to help you onboard labels. Okay, so let's look at FTX first, okay. We want to track the activity. We are interested in seeing the flow of the phase right. 

So, here is a chart. Basically here, we're just tracking the net flow of the FTX known addresses. Actually, let's start with the right-hand side. So, as I said, we're tracking the ether and all the ERC 20 tokens for the known FTX addresses. 

And then, you can see that the 6th so starting on the 5th. Alrighty, so first deck sec 56 cents. There's like a huge amount of outflow dollar outflow from the FTX. No addresses, right? A six was the height of it. There's like $665 million flowing out. 

And then, we can see that we can have like a breakdown of exactly what tokens were flowing out and flowing in. So, use a six as an example. So, here we've got the top tokens. We can click…so the ETH is this light shade of blue. You can see that around 330 mil of ETH were flown out. 

And then, in terms of USDC, 68 million of USDC flew out. And then, if we look at the 7th, right, we can see…okay, there's actually positive inflow of FTD token and the amount of basically 200 million. 

Yeah, so you can see we're gonna go into how to construct this visualization, but reading the chart, you can see, in general, in terms of NetFlow, there's a net outflow on the 6th and the 7th. 

In particular, a net outflow of like ether and USDC on the surface, but we also see some net inflow of the FTT token. And then obviously, we already have enough float. We can further break that down into the inflow and outflow so the deposits and withdrawals. 

Then we can see a huge amount of deposits like 955 million of USDC were deposited on the Sabbath. At the same time, a huge amount of outflow (like 949 million of USDC outflow from FTX) is using the same knowledge. 

It’s just like presented differently. We can see the deposits and withdrawals on the same chart. Right? 

So, the 7th is really the heavy activity day, right? It’s a lot of inflow and a lot of outflow. You can see from this…I guess, two bars here. And then also you can lock out the amount of the number of deposits in number of withdrawals. 

Right, so you can see the number of withdrawals far outpaced the number of deposits for these few days for the saga. Okay, so let's just go into a particular query to kind of see how exactly we can get the NetFlow of things? 

Okay, so let me make this a little bigger. So, first things first, we need to know the known addresses for the question at hand, right? We want to know the FTX net flow. So, what we need to know is the FTX addresses, right. 

And then, later on, we need to also know the USD token prices for various tokens so that we can adjust it to the USD amount. We also need to know the inflow to the addresses, so we plus the inflow and then we minus the outflow. Then, we need to aggregate it with some sort of timeline, right. 

So, that's the logic…getting the addresses, getting the token prices, getting the inflow, getting the outflow, and then netting it. Then, we're gonna get our desired result. Okay, so starting from the addresses, and using the labels table, we're basically finding the FTX addresses as a centralized exchanges. 

We're gonna grab all the addresses, known addresses for FTX entity. And then next step, we're gonna grab the token price and decimal for various tokens. 

So here, we can utilize the USD prices and the USD table. We're just going to timebox it because we're only looking at November 1 till now. 

So what happens is we're gonna timebox it. And then, as we've said, we're only looking at the theorem chain. We're gonna also filter for that. And then after that, just like really getting the columns you want. We want that time. We want the symbol, and the decimal is important because we need to know the decimal that we need to adjust for the role token amount. 

And then, we get the average price for that time period, which now we're doing this. Okay, so then we are set up for our auxiliary information that we need. Okay, so then first we do the ETH outflow and inflow. 

And the reason it's separate is because ETH is the native token. So, it's not the ERC 20 token, so we need to look at ETH by itself. But here, it’s pretty standard, right? We're just trying to look at the traces table to see the amount that was transferred to this address… or sorry…what amounts were transferred out from this addresses. 

So, from the FTX, right? So out from the FTX address. And then we're pretty much summing it up, but it's an outflow, so we're making it negative, and we're just timing it by negative one. 

That is the outflow and then inflow. It’s the same thing we're recording for the same table, except this time, we're looking for inflow into FTX. We're doing the filter condition to the FTX address, and then, we're summing up the value. But this time, it's positive value, so we'll leave it as it is. 

And then once we get ready, all that needs to be done is summing up the inflow and outflow. So, we're first unioning the two sub-table/sub-chords that we got and then summing up the inflow and outflow. Then, we need to adjust for the USD price of it. 

So, the way we adjust it is by joining the auxilary table that we already have the token price decimal table and then joining it by the time. Then basically, the raw amount times the price divided by the decimal gets the actual token USD amount. 

Quick word, why are we doing Wrapped Ether here? Basically Wrapped ETH is a proxy for the ether price here. 

Okay, so that's how we can get the ethernet USD flow. And very similarly for all the other ERC 20 tokens, we are looking at the transfer table for ERC 20 because all the transfers should emit a transfer event, right? 

And then similarly, we’re summing up the value that flew out minus times A minus one. Then, we’re getting the positive inflow and summing the inflow and outflow together, and then adjusting it with the appropriate price for that token. We must also adjust for the correct decimals. 

Once we got both ether and ERC 20 token together, we can union these two tables together to get our desired results, right? It’s a breakdown of different token flow for this entire period. 

And here, this case statement is just for more readability. So basically, we're saying if the symbol is within the symbols — basically, top 10 tokens defined — we're gonna list them out. 

Otherwise, we're gonna lump sum it all together as another symbol. So, we don't have 30 different tokens that we're reading. But yeah, that's the logic of how we can get the data in this visualization that we are seeing. 

So, logically, you're just getting the observed tables, right? Like the addresses and the price, the decimals you need to adjust. 

But then, in terms of how you get there and how you get the actual number, it's just plus the inflow minus outflow, net it together, and adjust for the certain period. That will be the logic and how you get the flow of things. 

But yeah, that's how you can do the FTX net flow. And very similarly, you can conduct the same investigation for Alameda Research as well. I guess, Boxer?

Boxer  21:25  

Real quick. Nathaniel in the chat has mentioned that, if you use FTX, you probably also include FTX US entities, which are supposed to be separate. And it’s just worth mentioning that, since there's FTX International and FTX US, the way you've structured this query with a…you've not specified that you want FTX International, but rather, you're just pulling every single label out of the table that includes any FTX entity. 

So, just as a caveat for…I think you've probably structured our queries like this. So, in this kind of session, we will always talk about FTX and FTX US just so there's no confusion.

Jackie  22:12  

Thank you. Thank you. Yes. Oh, yes,

Boxer  22:14  

I'll disappear again.

Jackie  22:18  

Thanks, Boxer. Yeah, so there are three addresses for FTX one and two. That is FTX International and after the US is the third. But yeah, so we’ll include all three for the investigation. 

All right. So, all the research (like very similarly), we can see a match flow. So, not like the money on each day that has blown through Alameda. We can see on the 8th, there's actually a positive injection of money…like $6.5 million that flows into Alameda Research. 

But yeah, so you can start conducting analysis and drawing conclusions for yourself. And just quickly, I want to highlight the ongoing relationship that you can sleuth for yourself while turning FTX and Alameda because FTX and Alameda have the same founder. Right? 

And then, obviously, the Alameda trades on FTX. But what's more, right, you might be curious, and now armed with the knowledge of the no known addresses, there might be some unknown addresses out there that we don't know. But the known addresses we can say what has happened, right? 

So, we can see the net flowgo from Alameda Research to FTX. This is what happened. It seemed like Alameda Research sent a lot of USDC to FTX. On November 6, so a total of 188 million USDC, right, to FTX. 

That's not…similarly, if you want to break down exactly from FTX to Alameda, you can also do that. 

And then, just a quick word, you can obviously see a lot of USDC has flown from Alameda Research to FDS during this saga. 

But yeah, so that is the beauty of on-chain data. Obviously, the caveat being we don't know everything associated with FTX and Almeida, but when you have the knowledge of the address, you can really achieve that trustless state and like you are tracking what's happening in real-time like yourself, right? 

So, when you see this happening, when you see up top, there's more outflow. There's more outflow than inflow. You might be thinking to yourself, maybe I should be taking some action, right? 

Just when you're equipped with the knowledge yourself, you hear of using resources, whatnot, but then you can use your own knowledge to help you make a decision even better. 

But yeah, so that is the portion about how to conduct on-chain activity investigative or FTX and bla bla. And now I will turn it to Tom to talk about what's next. Like how can we further advance this Open Data Initiative for better transparency and a more open finance environment?

Tom  25:37  

Hey, thank you. Thanks. Thanks a lot, Jackie. I was just trying to move my vote…my screen.

Jackie  25:44  

I will disappear.

Tom  25:47  

Okay. So thank you, Jackie, really thorough analysis and background on what happened behind the curtains of FTX and other medical research. 

And as Jackie also mentioned, this highlights the importance of transparency in decentralized exchanges because, basically, when you go into centralized exchanges, you can't really see the origin data within the central exchange exchanges, and therefore, it's basically like a black box. 

And right after the implosion of FTX, the founder of Binance, CZ, also mentioned that all centralized exchanges should do a Merkle tree proof of reserves. So, what actually is proof of reserves, and how can it help the whole crypto industry and centralize exchanges? 

So, according to the definition of Nick Carter, which is the founder of econometrics, I believe, he said that proof of reserves plus proof of liability equals proof of solvency. 

With proof of reserves, that is provided by different centralized changes in future, we will get part of the puzzle to understand whether decentralized exchange is potentially solvent or not. And this is something that is good for the industry long term. 

Because, right now, after different centralized changes have released the list of token addresses, we have better transparency in terms of what assets they currently holding, right. 

And in the meantime, we have seen that blockchain analytics really played a huge role. During the epic saga, for example, Brian Armstrong also mentioned that a lot of the brilliant people used different tools: Dune analytics, Etherscan, Binance, and so on, and so forth. 

A lot of smart people actually have been helping the community collaborating together to understand and provide the community to the regulators and wider public. 

They shed light about what is happening on FTX in terms of the on-chain transactions as Jackie also shows how many nettles flowed from FTX to Alameda and Alameda back to FTX. 

And that's the reason why proof of reserves are really needed — to help the industry move forward. And we can probably hope that it could regain trust from a B investors and regulators in the long-haul. 

And even though reserve sounds really nice, and it was also implemented by Kraken two years ago, in real-life implementation, there are also some limitations right now. And even though this methodology is not perfect, it's a really good first step, we believe. 

And the current limitations include that Blockchain analytics couldn't track off-chain assets. And then third-party attestation is trustless. So, for example, right now, we can only track the number of assets and the amount of assets, which are stored within the addresses. So, this is called proof of reserves. 

We previously showed the formula of proof of solvency, which includes another part, which is proof of liabilities. 

And this part usually require a third-party attestation, which is potentially an audit firm, or another third party to do the third-party attestation. Right now, most of the time is not trustless. 

And centralized exchanges can potentially borrow funds to cheat the proof of reserves, for example, before the association, they can borrow some funds to cover up the hole they have. I'm not shedding light here about which centralized change is doing something like that. 

But then it could be a potential that we — like a bad actor — could use a method to defraud the customers. And another limitation that I just mentioned is proof of reset… doesn't know right now…we only know the list of addresses, right? 

We don't know the actual liabilities. And even though, for example, some centralized changes may seem to have a huge balance sheet on-chain, but then we don't know the number of liabilities. That's why we can't really understand, or you don't really get the answer of whether decentralized exchange is solvent right now. 

And with that being said, it's still really exciting. I'm going to show you guys some examples of what we have been building. An example of how we use DNS to build a dashboard to track finances and addresses in terms of the balances and net flows, inflows and outflows over time. 

And this is the queries and dashboards we boast. First of all, the most interesting part is definitely looking into the balance over time, right. So, the method that we have is, if I quickly flick into the query here…basically, for the ETH balance, the methodology is similar to how you get the transfer over time. 

So basically, you will be summing up the number of inflows, number of outflows, and they get consumed in order to get the current imbalance. And after getting the ETH balance, you will need to get a ERC 20 bucks right. 

So, what I did is I used a really handy table here which is called balances Ethereum ERC 20. Then, they will basically provide you with really handy amounts of USD, you can just sum them all up together by different token symbols, and eventually, just union the ETH balance and the ERC 20 balance to be able to get the final balance of the TV addresses that you're tracking. 

And we also track the daily net flow, right, so a month of daily net flow are similar to what Jackie previously showed you guys. This is tracking the ERC 20 transfers and then the Ethereum transfer afterward. 

And also, we will list out the amount of holdings of respective tokens right. So currently, we are seeing that finance actually holds a lot of USD on their Ethereum wallet addresses. But as CZ also mentioned, USD is not actually issued by finance. 

So, they are in collaboration with a US-regulated entities called Paxos, which is responsible for issuing the USD. So CC mentioned on Twitter that they cleared the air. This is not correlated with finances and how FTT is correlated with FTX. 

But then, we also see that PNB is one of the largest holdings. So, right now, they have 4 billion worth of PMP. And then 5 billion worth of ETH in their holdings. 

And I really liked the cool new features that is introduced by Dune where you can see the amount of value in this progress bar. So, you can see how many tokens they have compared to the other token.

Tom 33:29  

And that's basically it for the token holdings part. And the last bit we would like to show you guys is what we usually like to add the real-time transaction of different entities, right. So, in here, you can track the real-time transaction. 

And we'll also offer what we promise with our fee from Dune. So, basically, you can decide which transaction…if you want to show all the transactions Binance has… 

You can basically click zero and then enter and then it will show all the transactions that happen on a particular day. You just to fit your type of analysis basically. 

And in the meantime, we also add a timeframe parameter here, so you can customize the dates that you want to analyze. 

For example, if you want to understand the number of transactions happening on a particular date, you can definitely pick it on here and then click Enter and apply the parameters. 

And lastly, one really cool feature I would love to introduce to you guys is that you can see here how to link the Etherscan URL. Right, so I think this is really cool. I'm not sure who introduced this type of free refresh. 

I believe that it's really helpful, and I would like everyone listening right now to potentially consider adding this feature, so when people are analyzing your dashboard, they can immediately link to Etherscan for more details, right? So, basically, she's showing links to the Etherscan URL. 

So, I think it's a really cool feature, and also, the cat labels feature also introduced by Dune recently. Also, this was mentioned by Jackie earlier, you can see the get labels. 

It helps the community to make more sense of who they are transferring to at the end of the day, right? 

So, what are you transferring to? If you want a more in-depth analysis on what's happening, you can definitely click these users, and then it will link you to Etherscan of that particular address, or you can click the transaction hash here. It will bring you to the transaction hash on Etherscan. 

This is basically our query on how we get the finance addresses. We also built some dashboards on FTX and Alameda and other interesting dashboards. 

So, feel free to check out Dune account, and I hope you guys find more interesting stuff there. But, before we enter my part, I also like to end with our predictions, not prediction, but like what we believe in the long haul. 

Blockchain analytics will still play an important role in the long run, especially after different centralized entities release the addresses, and it shows that blockchain analytics haven't been widely used it yet. 

And as Brian Armstrong tweeted as well, blockchain analytics are really powerful. Therefore, we believe that it is also part of our mission. 

Not only are we trying to provide crypto access exposure to everyone but also we want to provide better accessibility in terms of the crypto data, crypto outfits, and the information that was happening in the blockchain to everyone. That's why we are building different types of dashboards so that everyone, even my mom I hope, can easily understand using our dashboard, understanding what is happening at a blockchain level. 

And we hope to collaborate with more talented researchers and talented data analysts in the future to make more sense of the blockchain world and help more people understand what is happening in the blockchain. 

And it ties up with our mission statement, which will make it easy, so that's why our research is free. We hope. More people will be onboarded to the Web3 world and crypto. 

And feel free to subscribe to our newsletter and check out our latest research, which is done by a really talented researcher, Carlos, about delay this FTS in motion. So, thank you very much. And back to you, Boxer and Jackie.

Boxer  38:12  

Not all of us. Thanks for the great talk or presentation — whatever you want to call it. Yeah, it's a really interesting time in the crypto sphere. I think everyone is suddenly realizing that like, “Hey, there's actually this entry data thing that we've been doing for months and months and months.” 

Now, suddenly, everyone is talking about this. Like, hey, we can actually track these exchanges by doing on-chain, we can track the deposits, and we can track their withdrawals. Why are they actually so opaque? 

What's happening here? Like, why are they not just like… why don't they have a bunch of cold wallets that everyone can just track? 

So yeah, it's certainly a good time to be a Dune analyst. The data analyst or data analysis field in crypto is really just waking up I feel like, and certainly, there's a lot to be uncovered. 

I see that a lot of exchanges are now kind of releasing their cold wallets. But as you mentioned already, proof of reserves is not enough. You also need proof of liabilities, and like, how do we even do that? 

So yeah, all very interesting problem fields. There was one comment in the chat from once your crew or Nathaniel, which is basically…he mentioned that the hot wallets of addresses are not always the cold wallets of addresses, but sometimes they use the hot wallets to pay out, so it's sometimes by looking at static addresses. 

If you just look at the cold wallets, or you only look at the subset of wallets, it's sometimes hard to actually really decipher? 

What are the wallets that are associated with this exchange? And, of course, there would be solutions for this. The exchanges could just simply emit events, which is like, “Hey, these are our new wallets.”

These are the new wallets that we've just deployed. It could all be solved on-chain. But yeah, it's tough. We'll see. Any of you guys have some thoughts? I really liked your speech at the end. 

And I really appreciate 21Shares on Dune for providing this open-source research because that's what this space is all about. Right? Like it shouldn't sit behind paywalls. It shouldn't just be for your internal team; it should be out in the open. 

This is what this space is about. It's about public, transparent data, everyone should be able to audit the stuff that the big entities in the space are doing. And as sales users told us, as NFT access told us, as I didn't know, I think Genesis went under yesterday. What are all these people doing? 

This is not what we set out to build in this space. This is like…we don't want to build this decentralized casino…this is not the way so yeah…I don't know. I'll just keep talking. 

If you're not…if you want to say…I think this is the latest lesson here. I hope that the lesson of not your keys, not your crypto…that's now like in this generation of crypto investors as well with the 2014 generation and even I think the 27th generation still learned from like the 2014 generation of like a Mt. Gox went under. It was still very much apparent and on their minds. 

But now the second biggest exchange, like you can't understate how big this is, just went under with like the shadiest business models and the shadiest dealings today. 

The interim CEO or that take the guy who's leading the company now who's done the liquidation proceedings of Enron before he went in there. He was like, “I've never seen a company that was this badly managed.”

Like it's incredible. So, it's all of that in the blockchain space where everything is about transparency and being out and being public and being accountable. We trust codes, not humans. 

For the first three or four days after this, I was basically like, “What the fuck are we even doing?” How did this clown of a guy, and like, he isn't a clown? He's obviously very smart. Otherwise, he wouldn't have gotten so far. 

But how could we have allowed this actor, this bad actor that was so opaque, to never provide any transparency? I mean, he did but he fooled auditors by having faulty internal systems. 

And like, how did this guy rise to the top, and was he in DC ever, ever? It's incredible. It's incredible. 

Jackie  43:17  

Really, you know, I feel like now you might say that. It's just like…it kind of sucks that he was the face of the crypto industry. So, when people think about crypto, that's the complete opposite. Crypto was built for decentralization — for the common people. It was built for the trustless state. 

So, it's just like…I feel like it's hard to do this. But it's like never more than the right timing to advocate for the openness of everything. Yeah, sure. Like, it's really…we're not there yet. It's difficult to track all the wallets. 

I feel like now's our chance to tell people the open ethics of this, right? Tell people this is what you should do. This is what you can do on-chain, right? It's really like we walk through, I mean, we walked through…I walked through it pretty fast. 

You see, it's just like…okay, you track the balances, right, with some SQL knowledge in an hour and a unit and then you can just see some things happen on-chain on this day. 

This is the transaction associated with it…I don't know…I just feel like now is the time to change people's perception that this is not the whole ethos of the space. 

The ethos of this is completely opposite and what these people doing…like we are advocating for openness and transparency in the space, and it just kind of sucked that when people think about crypto they only think about this, which made to the major news but like the other face they don't make to that major news. 

And I feel it's important, though, like we take the opportunity that we have to just say, “Hey, that's not us. This is actually us.” 

Okay? Yeah.

Boxer  44:46  

No, no, no, it's like yeah…

Tom  44:49  

Yeah, also the team is in stressful times, especially, for example, in the previous terror, lunar collapse and then Celsius through ACD backhoe and announced FTX. 

It actually shows that the damage is happening and was done, right? And then, it shows that the crypto people, crypto analysts, and everyone in Crypto Twitter are collaborating together to analyze what is really happening. 

And I really love what like Dune Arcana or other people doing, launching an audit session to teach people and onboard more people. And that's what exactly what we need right now — better education. And to help people make sense of what is blockchain like right now. 

Because when you go on to Etherscan, it still takes some knowledge to understand what's happening on a blockchain level, right. 

And Dune is a really good tool to help people to easily visualize and understand what people could do with Blockchain analytics and make sense of what blockchain is in terms of the transactions and what was happening in the blockchain level. 

So, I think it's really cool. And we definitely need to collaborate more, especially in these stressful times. We must collaborate more to educate better and onboard better people in this space.

Boxer  46:06  

And also uphold your values. Like yeah, don't store your funds on FTX, don't deposit into Celsius, don't use Genesis lending or whatever. Be gone you devils like you are. You're trying to recentralize the space. 

This is all about you keeping your own assets in your own self custody. And self-custody is not rocket science. I don't understand why everyone is always like, “Oh, yeah, we can't force all the users to do self-custody.”

Like, come on. Buy a ledger. You write down a bunch of words, and then to unlock your ledger, you press a few keys. Then like you're done. Like, copy, copy…I don't get it.

Jackie  46:56  

I suspect maybe it's also some inherent…like, historically, it's always like, “Oh, we trust the government like a centralized party, right?” 

So, it might be a combination of multiparty signing, okay? We got this centralized party, but then you also have part of the key. 

They can't do anything themselves, so you have to prove it. So there's like…I don't know, maybe psychologically…I think it does take a while for people to get over the hump of like, “Okay, now we're going to do self-custody,” because I just feel like most people don't have enough knowledge about this. 

And also, this is just like a new concept. Like, I don't know, it just takes a while for people to adopt. And in the meanwhile, people are in the traditional way. 

So, like how do we help them with the transitional period where he's like, “Okay, well, testing wallet and more education”? Stuff like that. Yeah, yeah. But yeah, it shouldn't be that way. But it's hard for me.

Boxer  47:59  

Yeah. Fair enough. Fair enough. Yeah, you mentioned the collaboration between people and how it's amazing to see. 

And this, Brian, I'm so intrigued that you threw up in your presentation about the amount of credit citizen journalism has gotten the last few days. It's like this account called like FBI fanboy or something like that. There's just some crypto unknowns coming out of the depths of the internet. 

They do better journalism than the New York Times writers and Bloomberg, and it's just incredible. And you just got to ask yourself, like, what is happening in the world? 

And I think that it's incredible. And that's like the power of decentralization of on all levels. And that's enabled by these old men transparent systems, like we can actually follow the traces of everything. I don't know that the friction has really been reduced to the access of information and that really makes it way easier to find bad actors if you go looking for them.

Jackie  49:09  

Yeah, yeah. Right. Because okay, some guy releases addresses. And then immediately a lot of people start using these addresses and dig into it. And then immediately, people are like, “Okay, what's next?”

So, then you're learning from each other. You're doing investigations in real-time with each other all over the world, and it’s just amazing, right? Like Thomas in Hong Kong. I'm in the US. Boxer, you're really just like…but we're collaborating on the same thing. And it's so amazing. And there's an open system.

Boxer  49:37  

Yeah, that's why we're all here to build a brighter future. Although, you gotta say there are also problems with that in terms of the on-chain privacy that is basically not given since the US government has, for some reason, decided to ban Tornado Cash. 

I mean, not for some reason. Korea was obviously using it for to launder money. But it's pretty sad. I would like to have my privacy tool back. Maybe there will be a replacement at some point in the future. 

And I think people are actually protesting or like, how do you say that? Like they go into court about like the bending of Tornado Cash? And we'll see what comes of that. Because I think not everything should be public. 

That's also not the case. If I send Tom money or if I buy a donor, the cashier shouldn't be able to see what my net worth is. That's not correct. 

And like there's this. I don't know if this is a German thing, but you get these bonus cards, where the cashier will ask you, “Hey, do you have our…I don't know...leader card, so you get like I don't know, discounts.” 

So, all they do is collect your data. And if everything was on the blockchain, basically, you would opt into the system by default. And that's also not good. So, we need pseudonymity on the blockchain, and you need to be able to like easily switch addresses without leaving a trace to your old address. 

It's all there, there are still a lot of riddles to be solved. But especially in terms of like this big picture kind of finance. These systems need to be transparent. A quarterly report is not enough if I can…like we are having a worldwide conference right now. 

Global companies still report the data like every three months with a heavily…I don't know…corrected balance sheet. And it's just like, what are we doing? Like these things need to like progress. 

And I think like an actual open, transparent blockchain system is the way to do that. How individual actors play into that and what we do about our privacy…that's a little slow to resolve, but I think this system should be open, and they should be transparent.

Jackie  52:18  

Yeah, also looks like we should learn from…even though we're advocating for an open finance system…there's still a lot that we should and could have learned from the TRad fi world. 

You know the proprietary trading firm versus like exchange…a lot of things just because we're doing it in a new environment doesn't mean we should like completely scratch and start our new thing. 

So yeah, I guess it's just a lot of balance. And also just learning from the past when it's appropriate as well.

Tom  52:53  

Yeah, exactly. Some regulation is huge for a reason, right? Especially when you're segregating different entities because they shouldn't be right under the same umbrella. And regarding boxes point, I believe that the privacy is really needed, right? I can't be showing on my network. 

For now, I can't be flexing my network, sharing your money, even though I don't have much. Right, still. And our team is always…especially our director…research-led. 

He always…we also believe in the privacy future, which is powered by super knowledge. And we're really excited about the super knowledge future. 

And we believe that it could help the industry to move forward, especially in terms of scalability and privacy. There can be a lot of adoption rates in terms of like different applications. 

And like, it's really exciting, especially in the future. There are three major plays, running for the first to become the first ZK EVM - Polygon, Scroll, ZK Sync, and I'm really excited to have a chance in the future to test it and analyze it on Dune in the future. It's possible.

Boxer  54:09  

We're doing our best. Always exciting.

Jackie  54:13  

All right.

Boxer  54:17  

All right. This was great. We got a bunch of great comments from the chat. Rigs Rob. Crypto Malaysia, Laughter Session. Yes. Thank you. And of course, preached on…

All right. This has been great. Thank you so much, I think. Yeah, there are no more questions from the chat. So, we'll end this here. Sounds good. Yeah. Thanks so much for coming on, Tom. 

Yeah, great to see the work you guys did. Great to see that it's open source. Really, really appreciate you guys as a player on Dune. Thank you. Take care everyone. Any last words from you guys?

Jackie  55:08  

When Dune on-Cosmo from LarryBinanceJr?

Boxer  55:11  

We just got a question. We don't know. It's the wrong…come into our Discord. We can maybe discuss…I’m not making public comments about that.

Jackie  55:27  

All right, well, last comment would be…more conviction about open data and let the data flow.

Tom 55:35  

And my last comment will be...stay tuned for our next dashboard. We will be analyzing different centralized changes so stay tuned.

Boxer  55:44  

Okay, sounds exciting. All right. Bye bye, everyone. Bye bye.