The altcoin Tellor (TRB) experienced exceptionally volatile behavior on December 31, raising concerns about market manipulation and causing more than $68 million in liquidations of leveraged positions. On that day, Tellor’s price surged nearly 150%, reaching a new all-time high of $619 before sharply falling to $136 in just 13 hours.
Tellor’s trading activity came under scrutiny when Etherscan data revealed that the Tellor team transferred 4,211 TRB, approximately worth $2.4 million at that time, to a Coinbase wallet just as the price surged. This transfer raised additional suspicions about market manipulation involving Tellor.
🚨🚨 $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
The sudden price drop led to liquidations of over $68 million, according to data from CoinGlass cited by blockchain analytics services. However, Spot on Chain, a blockchain analytics platform, pointed out that these price fluctuations could also be linked to the fact that 26% of the circulating supply of TRB is concentrated in just 20 whale wallets.
These whale addresses, acquiring TRB at prices around $15, have been gradually depositing their holdings into centralized exchanges, generating seemingly artificial price movements and securing significant profits, according to Spot On Chain.
Tellor’s Volatility Hits Synthetix Hard
The situation not only impacted Tellor but also various decentralized perpetual trading protocols like Synthetix (SNX) and Hyperliquid. Synthetix participants suffered losses of around $2 million due to a failure in the automated risk parameters of the decentralized protocol, which failed to recognize the alleged manipulation of TRB’s price.
Synthetix founder Kain Warwick highlighted that this incident underscores the importance of risk management in a decentralized environment. He explained that the increase in TRB’s open interest cap from $250,000 to $12.5 million with the rising prices contributed to short positions and substantial losses for SNX participants.
This episode underscores the challenges and costs associated with operations on decentralized exchanges, emphasizing the need to implement robust risk controls to ensure the integrity and stability of these protocols.
