Mathematics reveal the hidden patterns behind the collapse of a $ 3.5 billion currency

In new Ticket Posted in ACM transactions on the webResearchers from Queen Mary University in London revealed the complex mechanisms behind one of the most dramatic collapses in the crystallized currency world: the fall of Terrausd Stablecoin and its associated currency, Luna. Using advanced sporting technologies and advanced programs, the team set suspicious trading patterns indicating a coordinated attack on the ecosystem, which led to a catastrophic loss of $ 3.5 billion in its value overnight.

The study, led by Dr. Richard Cling and his team, employs a multi -layer graph analysis – a sophisticated way to examine complex systems interconnected over time. This approach allowed researchers to plan relationships between the different cryptocurrencies that are traded on the Ethereum Blockchain group, revealing how Terrausd Stablecoin has been destabilized through a series of wide vertical deals.

Stablecoins is designed like Terrausd to maintain a fixed value, usually linked to Fiat like the US dollar. However, in May 2022, Terrausd and her sister currency, Luna, witnessed a catastrophic collapse. Dr. Klij’s research sheds light on how this occurred, and revealed evidence of a coordinated attack by the merchants who were betting on the regime, a practice known as “abbreviation”.

“What we found was unusual,” says Dr. Cling. “On the days before the collapse, we noticed very abnormal trading patterns. Instead of the usual spread of transactions across hundreds of merchants, we saw a handful of individuals who control the entire market almost. These patterns smoke a gun on a deliberate attempt to destabilize the system.”

The team’s analysis revealed that on the main dates, only five or six traders representing almost all trading activity, with almost every share of the market control. This level of coordination is actually impossible by chance in a natural trading environment and strongly indicates that these individuals were working together to move the collapse.

The research not only provides an insight into the collapse of Terrausd, but also provides a strong new tool for analyzing encrypted currency markets. The team program, which was developed in cooperation with Pometry, a company spinning from Queen Mary University, uses the analysis and interpretation of the searry network commerce Data. This tool can be proven invaluable for organizers, investors and researchers who seek to understand and mitigate the risks in the world of volatile cryptocurrencies.

“It is often seen as west of financial affairs, with little oversight,” says Dr. Cling. “Our work shows that by applying strict sporting techniques, we can discover hidden patterns and behaviors that drive these markets. This is not only a matter of understanding the error that occurred in the past – it is related to building a safer and more transparent financial system for the future.”

The repercussions of this research extend beyond the crystallized currency world. The methods developed by Dr. Clog and his team can be applied to a wide range of complex systems, from financial markets to social networks. to Organizational agenciesThis work provides a new way to monitor and protect regular risks, and protect both individual investors and the wider economy.