(This article is an abridged version. The full text was originally written by me and was first published on Wu Blockchain on March 4: https://mp.weixin.qq.com/s/cVcctUa9JPYf33ntJ066qQ)
Let’s talk about the conclusion first: There is no evidence that the transfer of 1.8 billion USDC mentioned by Forbes is an act of misappropriating the assets of ordinary users. It is more likely to be a collective withdrawal behavior of institutional users. The author believes that this is probably because Binance asked partner institutions to withdraw their USDC on the eve of USDC being delisted.
The core point of the long article in Forbes refers to the $1.8 billion in stablecoins last year, with two transactions
① The first stable currency is USDC, which refers to the transfer of 1.8 billion USDC from Binance-Peg Tokens (address) to Binance 8 at 13:42 on August 17, 2022, and then transferred to Amber Group through Binance 14 on the 24th. Alameda, Justin Sun and other addresses. (1.8 billion is an approximation, the actual number is 1.779 billion)
② The second stablecoin is BUSD, which refers to the transfer of 1.8 billion BUSD from Binance-Peg Tokens to Binance 8 at 13:39 on August 17, 2022, and then transferred back to Binance-Peg Tokens from Binance 8 on the 23rd. (1.8 billion is an approximation, the actual number is 1.854 billion)
The dispute is mainly over the first 1.8 billion USDC, so the focus will also be on this transaction. The flow of the second tranche of 1.8 billion BUSD was relatively simple, and eventually basically flowed back to its original position. Forbes did not read too much into this transaction. In the subsequent analysis, the author speculates that the second tranche of 1.8 billion BUSD may be a supporting measure for the first tranche of 1.8 billion USDC.
Let’s look at BUSD first
Theoretically, the B-P Tokens address refers to packaging/anchoring assets issued on the native chain on BSC, such as the most classic and most debated BUSD in the past period. BUSD is a stablecoin asset issued by Paxos on the Ethereum chain, and the BUSD circulating on BSC is its anchored version. According to the 1:1 anchoring relationship, in theory, the amount of BUSD held by the B-P Tokens address on Ethereum should be enough to completely cover the supply of BUSD on BSC at any one time. In actual situations, anchoring is not real-time, and a certain deviation is normal, and will be rebalanced or updated regularly. The most recent B-P Tokens BUSD balance was significantly lower than the BSC BUSD supply between August 17 and 23 last year, which was the result of the 1.8 billion BUSD transfer. At other times, B-P Tokens BUSD is always approximately equal to or greater than the BSC BUSD supply, and it is not difficult to find that since the 1.8 billion BUSD circulation last year, the difference between the two has become relatively larger.
In addition, from the POF reserve address disclosed by Binance in November last year, B-P Tokens is one of the important addresses used as Binance BUSD (Ethereum) reserves. In other words, the BUSD balance in the B-P Tokens address not only serves as an anchor for BSC BUSD (managed by Binance), and a considerable part of it belongs to user assets. Between August 17th and 23rd, the changes in the B-P Tokens address of 1.8 billion BUSD did not cause obvious changes in the supply of BUSD on the BSC chain. From this perspective, this may be just an institutional transaction. User’s deposit and withdrawal behavior. Another possibility, which I will continue to explore below, is to return to the controversial point USDC.
Back to USDC
The role of USDC on B-P Tokens is similar. Circle does not issue native USDC on the BSC chain, so the USDC circulating on BSC is actually the anchor asset on the native issuance chain Ethereum. Therefore, the USDC on B-P Tokens anchors the USDC supply on BSC. In theory, like BUSD, the B-P Tokens USDC balance should cover the BSC USDC supply. However, this is not the case.
The USDC balance in the B-P Tokens wallet can be divided into several key nodes,
One is before 1.8 billion USDC was transferred from B-P Tokens to Binance 8. In the two to three months before this point in time, the B-P Tokens USDC balance was slightly less than the BSC USDC supply.
The second is after 1.8 billion USDC is transferred out from B-P Tokens until December 6. Since the transfer of 1.8 billion USDC, the balance of B-P Tokens has become 0 during this time interval, but BSC USDC is still in circulation. Is this period of time unanchored? Not necessarily. In fact, it is more likely that there are other wallets on Binance that are enough to cover this part of the USDC assets circulating on BSC. In other words, there are one or more other wallets for anchoring.
Third, since December 6, Binance 8 has re-transferred USDC assets to B-P Tokens that are sufficient to cover the supply of BSC USDC. Since then, the balance of B-P Tokens USDC has been anchored to BSC USDC again.
In addition, although the B-P Tokens address was not included as a USDC reserve address in the POF disclosed in November, B-P Tokens is one of the reserve addresses of the two major stablecoins, USDT and BUSD. Therefore, it is inferred that before Binance announced the removal of USDC, The situation of USDC at this address may be similar to BUSD - it exists as an anchor asset and a user asset coexisting. What is different from BUSD is that the B-P Tokens address may only be used as one of the addresses to anchor the BSC USDC supply, because BSC USDC is still running for a long time after the wallet's USDC balance returns to zero, so it is likely to still be running. There is one or more similar addresses holding dual identities at a certain period of time. Therefore, considering the lack of correlation between the B-P Tokens USDC balance changes and the BSC USDC supply, and the subsequent flow to institutions, it is more likely to be institutional withdrawal behavior.
possible truth
On September 5 last year, Binance issued an announcement to automatically convert USDC to BUSD and delist the USDC trading pair. It is worth noting that for USDC, Binance does not delist it in a direct sense, but converts USDC into BUSD. This may lead to insufficient collateral, insufficient BUSD reserves, etc. caused by converting large USDC deposits of institutions into BUSD. question. It is wise to let the institution pick it up first. This announcement is about half a month apart from August 17, which is relatively appropriate in terms of time. The organization has sufficient time to consider and operate. In addition, looking back at the BUSD transfer with a similar time gap, this may be another preparation by Binance in case there is really an organization willing to convert large amounts of USDC into BUSD and use other cold wallets to temporarily replace the functions of peg BSC BUSD. . Perhaps after the attitude of the partner institution is clarified, it can be turned back to use as an anchor.
Judging from the USDC transfer path, B-P Tokens → Binance 8 → Binance 14, this is more likely to be the conversion process from cold wallet to hot wallet, and is Binance’s preparation for large USDC withdrawals from institutions. From the current perspective, Binance 14 belongs to the USDC user asset reserve address disclosed by Binance, and judging from the nature of the wallet and historical balance, this address is a hot wallet and cannot have the responsibility of anchoring BSC USDC, and does not Due to the complexity of the assets held by Binance 8, it is reasonable to withdraw from Binance 14, which is only used as a reserve of user assets.
The author understands that Forbes’ accusation of large transfers of B-P Tokens assets as misappropriation is misled by label definitions. For example, the assets on the Binance-Peg Tokens address have multiple attributes and are not entirely user assets; on the B-P Tokens address The main user assets are USDT and BUSD; while the user's USDC assets are mainly composed of a total of 5 addresses such as Binance 14, 15, 16, etc. But on the other hand, this also requires exchanges to better classify and use address labels.
