In May 2022, the cryptocurrency world experienced an earthquake: the collapse of TerraUSD (UST) and its associated token LUNA. However, this crash, far from being a mere market accident, could actually have been triggered by a coordinated attack carried out by a handful of traders. This is revealed by a striking study from Queen Mary University of London.
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đ Researchers decode manipulation
Using a method of multi-layer temporal graph analysis (yes, itâs as technical as it sounds), researchers studied the interactions between different tokens on the blockchain. Their discovery? A small group of actors concentrating massive influence, just before the crash. Everything suggests a deliberate and strategic action.
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đ ïž Software to detect abuse
In partnership with the company Pometry, researchers have developed a tool to detect suspicious behaviors on blockchains. The goal: to identify in real-time abnormal activities that could lead to market manipulation. Bonus: this technology could also be applied to social networks, traditional financial markets, or other complex systems.
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âïž Stablecoins: really stable?
Stablecoins like TerraUSD are supposed to offer stable value, usually pegged to the dollar. However, the collapse of Terra shows that these systems, especially those based on internal algorithms, are not immune to manipulation or loss of trust. The promised stability can sometimes be a fragile illusion.
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đ The urgent need for regulation
This case highlights the fragility of a market that is still largely unregulated, where a few individuals can impact billions. The study shows the importance of proactive monitoring, and especially of tools capable of spotting weak signals before it is too late.
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Source: Original article available on Techno-Science.net: "How a handful of traders caused the collapse of two cryptocurrencies"
Link: techno-science.net
