Telor altcoin’s bizar 150% pump and then fraud concerns fall
A relatively unknown altcoin called Tellor (TRB) has been thrust into the public eye after rising nearly 150% to a new all-time high of $619 before plunging to $136 within 13 hours on December 31st.
According to Etherscan data, Tellor's unusual trading activity has come into question. Teller's team transferred 4,211 TRB worth an estimated $2.4 million at the time – just as the price was rising – to the Coinbase wallet at 8:41 pm UTC.
Meanwhile, the sudden drop in the value of Tellor led to more than $68 million in outflows, according to data from CoinGlass, which was later cited by blockchain analytics service Lookonchain in a Jan. 1 post to X (formerly Twitter).
In the last 24 hours, $TRB rose to $600 and then fell to $137, which resulted in $68M in assets being withdrawn, making it a very liquid token.
We noticed that the #Teller group has deposited 4,211$TRB ($2.4M) after the $TRB price hike.
Address: pic.twitter.com/IBty2Wf2gI
— Lookonchain (@lookonchain) January 1, 2024
Blockchain analytics platform Spot On Chain, however, says that the wild price increase can be attributed to the fact that 95% of the TRB distribution is spread among 20 “whale” wallets.
Small whale addresses have started collecting TRB at around $15 and are gradually moving their holdings to the central exchange in an artificial price movement to lock in higher profits, Spot On Chain said.
$TRB hits all-time high at $225 today, but what's next?
Current Status:
➡️ Of the 2.5M$TRB in circulation, about 1.7M are on exchanges and 660K are held by a group of 20 whales (which is ~95% of tokens).
➡️ A group of whales make these signs in… pic.twitter.com/kWbZGxEqcv
— Spot On Chain (@spotonchain) December 29, 2023
Cointelegraph reached out to Telor for comment but did not receive a response at press time.
TRB is a utility token for Tellor, a decentralized blockchain network — similar to Chainlink (LINK) — that feeds price data to smart contracts running on blockchain networks.
Decentralized derivative protocols are caught in the crossfire.
Notably, several decentralized perpetual trading protocols such as Synthetix (SNX) and Hyperliquid have come under fire, with SNX shareholders suffering low seven-figure losses following TRB's sudden price drop.
Many perp dexs are completely correct on this TRB pnd.
SNX and Hyperliquid both hit who else? https://t.co/uf5Ju4DrmU
— King (@0xgodking) December 31, 2023
Syntex founder Kain Warwick wrote to X (formerly Twitter) on January 1st that Syntex shareholders have lost nearly $2 million.
This is reportedly due to a failure of the automated risk criteria on the decentralized protocol, which did not recognize that the TRB price was actively moving to produce abnormal price points.
what happened? TRB had an open interest cap of 250k USD which has risen to 12.5m as prices have increased over the past few months. This should have been fixed down, but the risk controls were lax, there was a distribution of responsibility. Although the Spartan Council is responsible for the params.
— kain.eth (@kaiynne) January 1, 2024
Warwick wrote that TRB has an open interest cap of $250,000, which has increased in value over the past few months to $12.5 million.
Notably, the open interest cap is set at the TRB and not at a fixed notional US dollar – meaning traders can continue to over-bet on decentralized derivatives contracts.
“A lot of short positions were opened when the price went up and there was no Arab to balance it when the space and price went away,” added Warwick.
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“This should have been fixed in retrospect, but the risk controls were lax, there was a distribution of responsibility. The Spartan Council is responsible for Param,” he wrote.
Ultimately, Warwick concluded that risk management of a decentralized perpetual exchange like Syntex would have to be “baked in” and could not be resolved through traditional dispute resolution mechanisms such as the courts.
“Either you build a strong decentralized trading platform and live with your risk control, or you're becoming like a DEX. I see these types of events as the price of being a dick.
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