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Hodlnaut May Have Massive Undisclosed Losses from Terra Collapse
Company appears to have transferred approximately $300 million UST to FTX as the token plummeted in value
Note: A substantial portion of this research was performed by a concerned individual who contacted us recently. This person wanted to remain anonymous, but we wanted to attribute their work as they basically handed this story to us!
Hodlnaut, a Singapore-based centralized crypto lending platform, appears to have taken massive losses following the collapse of the Terra protocol. According to blockchain data verified by Nansen, the company sent $171 million UST to FTX on May 11, 2022 as the depeg of the stablecoin was accelerating via the Ethereum chain:
The transaction ID’s are:
0x15b7ccd728d7cf4d29e2944c8e254a3e86a34b661b3551be82ea5cba94c71ade (49,999,933.305061 UST)
0xe7339244220b6bbb2a2677d129b42f1761f8fa3ad26883aad457f840cc0d8fae (120,913,170.122171 UST)
According to additional work performed by our source, an additional 138 million UST were sent by Hodlnaut via the Terra chain to FTX. He identified this Terra wallet as Hodlnaut’s by transaction matching; these data are included as an appendix at the end of this article.
Following TXIDs for Terra:
4F4778EEDB69DD754C8C606D877B6D2B7CDFDF3F3D58C3C88082DF2983BA04EB (58,201,910 UST)
068AA97CBDCA6989613E222B3FEFB36911B2FAAC2C90273D392A3B934124DF42 (80,000,000 UST)
5963847DB4CA2025CF560F190449FD2AE05FCF0D11E3C97C72A809C2C7782D8C (2,000,000 UST)
During this exit, the price of UST collapsed from $0.69 to $0.19. It seems plausible that Hodlnaut’s move out of Terra accelerated the depeg due to the size of the transactions
Looking back further, it appears that the majority of the UST held by Hodlnaut was purchased via swaps of Tether and USDC:
We also discovered that this wallet was one of the largest liquidity providers of UST to UST <> 3crv pool on Curve. It appears that Hodlnaut was also one of the largest depositors on Anchor where they begun deploying there on 21st January 2022, with as much as 200–300m UST deposited there at its peak and 11.1m UST in earnings.
The strategy here is clear, using client/users’ money deposit into Anchor to make a sweet 19.5% yield and then pay their users 8–13% in stables yield depending on which stables they deposit into the platform.
We were able to independently verify the following wallets as belonging to Hodlnaut:
Withdrawal wallet: 0x937cdc9e86ba06aa5aaea221017a1d9fc7f59efd
Deposit wallet: 0x2a67035357C3045438F3A92E46870a9E48e5AAB7
Defi/Trading Wallet: 0x99fd1378ca799ed6772fe7bcdc9b30b389518962
Terra Defi wallet: terra1ny3ndl9awztxn52ktuakw8zrtdkmvu0cc8g32g
Currently, the three Ethereum wallets listed above are attributed by Nansen to Hodlnaut.
We estimate that Hodlnaut likely suffered tens of millions of dollars in this event. However, the company does not appear to have made disclosures about this loss. Indeed, our anonymous source became frustrated when trying to obtain information from the company and was eventually blocked from their social media.
At the beginning of this year, Hodlnaut claimed to have ~$500 million AUM. The losses from the Terra collapse would likely amount to at least 10% of AUM. We hope that the Hodlnaut team will address these concerns in a transparent manner soon.
Appendix: Identifying Hodlnaut’s Terra wallet
“If one were to try depositing assets on Hodlnaut’s platform, it is clear that assets would eventually arrive in wallet 0x2a after one hop and from time to time assets are being sent to wallet 0x99 for Defi deployment. And if you look further at some of the transactions they have on 0x99, wormhole interactions can be found for example:
Above are just some examples of the wormhole transactions and how one can link the ETH defi wallet to the Terra defi wallet. There are definitely more interactions that that. ”