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FTX Issues
Per a CoinDesk report in November 2022, trading firm Alameda Research, which has close ties to FTX (discussed more below), has ~$3.7 billion of unlocked FTT and ~$2.2b billion of "FTT collateral" on its balance sheet.
This story sparked instant liquidity concerns and possibly was responsible for Binance CEO Changpeng Zhao liquidating the FTT on its books. He said that Binance would attempt to minimize market impact. The controversy led to FTT trade volume reaching its highest level in over a year and triggered a “bank run” on FTX, with ~$800 million in net-withdrawals from the exchange in just under two days.
Source: Kaiko
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Alameda and Its Ties to FTT, SOL, and USDT
Alameda Research is a self-described “multistage crypto and fintech investment firm,” however, the company’s reach spans the entire crypto-industry, including Solana. Alameda is the parent company of the crypto spot and derivatives exchange FTX, a quant trading firm, and a major venture capitalist across the ecosystem.
Alameda participated in one of Solana’s early-round token sales in 2019 alongside Polychain Capital and CoinShares. Sam Bankman-Fried, Alameda Co-Founder and one of the richest individuals in the cryptocurrency space despite only entering it ~four years ago, remains one of Solana’s most vocal proponents. Alameda is one of the biggest market makers in the crypto industry, making its close alignment with Solana extremely beneficial for the immature but growing blockchain.
In a late 2021 report from Protos, it was reported that Tether's primary "customers" are market maker entities, like Alameda, that provide liquidity to exchanges and profit on the spread of assets (the difference in price between buy and sell orders). Just two market makers, Alameda Research and Cumberland Global (a subsidiary of trading giant DRW), are the two biggest USDT minters in the markets. Together, the two entities have received over$60 billion in USDT over the last four years, equal to around 55% of all outbound volume—ever.
Protos tracked 70% of all Tether (USDT) flows ever and found that Alameda Research accounted for ~35% of all outbound volume. Alameda Research has received ~$37 billion in USDT, ~$32 billion in 2021 alone. The chart below illustrates that USDT inflows began to increase dramatically in mid-2020 during the latest crypto bull run and also when Solana began gaining the public’s attention. While plenty of crypto projects are well-funded and have the support of major industry players, there are few that can compete with having FTX and Alameda in your corner.
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Alameda Research, a $100 million AUM quantitative cryptocurrency trading firm, backs FTX and has become the largest liquidity provider and market maker in the global cryptocurrency market. Alameda accounts for 15% of global stablecoin volume and is ranked publicly on the BitMEX leaderboard.
