Carving Through Chainlink: Part Two (Transaction Analysis of Team Sell-Offs)


10 min read
Carving Through Chainlink: Part Two (Transaction Analysis of Team Sell-Offs)

There is perhaps no better reference for Chainlink token metrics than this Medium article (published by Glassnode) = https://medium.com/glassnode-insights/on-chain-distribution-analysis-of-chainlink-link-5ee7acb62f62

Here, they provide a wealth of information that is difficult, if not impossible to be found elsewhere in the blockchain space.

For convenience, we will repost some of that information in the following sections.

Token Sale Terms

According to Glassnode, this information is no longer publicly available on 'smartcontract.com' (for whatever reason), but they have fortunately done their due diligence of saving the graphic for future reference.

Below is the 'Token Sale Terms' graphic for Chainlink:

Below are all of the wallet addresses that belong to the Chainlink Team (as listed by Glassnode):

  • 0xe0362f7445e3203a496f6f8b3d51cbb413b69be2 — Current balance: 50,000,000 LINK
  • 0x75398564ce69b7498da10a11ab06fd8ff549001c — Current balance: 50,000,000 LINK
  • 0x5560d001f977df5e49ead7ab0bdd437c4ee3a99e — Current balance: 50,000,000 LINK
  • 0xdad22a85ef8310ef582b70e4051e543f3153e11f — Current balance: 37,400,000 LINK
  • 0xbe6977e08d4479c0a6777539ae0e8fa27be4e9d6 — Current balance: 50,000,000 LINK
  • 0xf37c348b7d19b17b29cd5cfa64cfa48e2d6eb8db — Current balance: 35,590,421.01 LINK

Additional Information (Critical)

Each Address Was Sent 50 million $LINK tokens when the token was initially distributed

Proof in Transaction = https://etherscan.io/token/0x514910771af9ca656af840dff83e8264ecf986ca?a=0xf55037738604fddfc4043d12f25124e94d7d1780

Moving Forward

We will evaluate the balance of each address provided above (as well as any additional / peripheral addresses belong to the $LINK team).

Evaluating Address Number One (0xe0362f7445e3203a496f6f8b3d51cbb413b69be2)

There isn't too much to say about this address here as it appears that it has kept the 50 million $LINK tokens that it originally received (see below):

Since then, no $LINK tokens have moved from this wallet address.

Evaluating Address Number Two (0x75398564ce69b7498da10a11ab06fd8ff549001c)

Similar to address number one, this one still possesses all 50 million $LINK that it received originally following during the token sale distribution (see below):

Evaluating Address Number Three (0x5560d001f977df5e49ead7ab0bdd437c4ee3a99e)

Same story here as what we saw with the first two addresses (50 million $LINK tokens are still in tact); see below:

Evaluating Address Number Four (0xdad22a85ef8310ef582b70e4051e543f3153e11f)

Here, the story is a bit different from what we saw with the first three wallets.

Let's start with a look below:

As we can see from the screenshot above, there are only 37.4 million $LINK tokens remaining (versus the 50 million $LINK tokens that it started with).

That means that, thus far, 12.6 million $LINK tokens have been liquidated from this wallet.

Here in this section, we'll just cover a few quick facts that we can ascertain from this wallet (via external examination on Etherscan)

Liquidation Period

All outgoing transactions ($LINK transferred out) for this wallet took place between July 2nd, 2019 to August 23rd, 2019.

In total, the 12.6 million $LINK were moved out in a total of 19 transactions, resulting in an average of 663,000 $LINK (approx.) transfered out, per transaction.

Total Amount (in USD) Liquidated

The total amount liquidated from this wallet (at the time fo the TX) is approximately $50 million USD (to date).

That was calculated by extracting the outgoing transactions from this address, calculating the price of $LINK at the time of transfer, then doing the simple math from there.

Below is a screenshot of some of this scrapwork that we did for the $LINK team's fourth wallet:

Tracking Down Funds From the Fourth Address (0xdad22a85ef8310ef582b70e4051e543f3153e11f)

For this task, we decided to go with 'Ethtective', as their website has proven to be the most effective to use for this task.

There will be a few additional ones that we rotate in, as needed (they will be referenced in kind).

Starting With the Primary Recipient Address

Every outgoing $LINK transfer from the $LINK team's fourth listed address went to this address: 0x1f9e26f1c050b5c018ab0e66fcae8e4394eb0165

Here's its Etherscan Link: https://etherscan.io/address/0x1f9e26f1c050b5c018ab0e66fcae8e4394eb0165

Based on Etherscan

The bulk $LINK transactions that this address received were broken down before being distributed elsewhere:

Also, it appears that this address has been used to liquidate Chainlink tokens long before it received any from the fourth Chainlink dev wallet address we're covering in this section.

See Below:

Remember, the first outgoing transaction from Chainlink's fourth wallet address occurred on July 2nd, 2019.

However, in the screenshot above, we can see that there are outgoing transactions of $LINK dating back to (at least) February 2019.

Beginning of the Recipient Wallet Address History

Below, we can see that this wallet address' history begins December 14th/15th, 2018 - well before it ever received any funds from Chainlink's fourth dev-owned address:

Interim Implications / Conclusions

Based on what we now know, we can definitively state that:

Wallet Address 0x1f9e26f1c050b5c018ab0e66fcae8e4394eb0165 is owned by the $LINK team ; we know this because this is where the fourth wallet, which we know to be owned by the $LINK team, can be seen sending $50 million worth of $LINK tokens (at the time of transfer), explicitly.

Its true purpose cannot be known to us (since we're in $LINK's internal team), but we can state definitively that this wallet is being used as a 'jump point' / 'jump wallet' for distribution.

In other words, it appears that once this wallet receives $LINK, it distributes said $LINK out of the wallet in smaller amounts than what was received.

More than likely, any other addresses sending $LINK to this address belong to the $LINK team as well. This is a simple conclusion to make because, if the wallet is owned by the $LINK team (which we established in #1 above), then more than likely the $LINK team are the only ones that would be incentivized to send funds to this address.

Disclaimer: Perhaps #3 is wrong - but until there is proof provided to the contrary, then this will be assumed true (i.e., some sort of public identification / purpose for this wallet that indicates that outside users would have a plausible incentive to be sending funds to this wallet address as well).

We're writing down the names of all of these addresses, because it is more than likely that the $LINK team owns these addresses.

There may be some overlap with the six addresses that we listed above in one of our prior sections (if so, that will be parsed out later in this study).

List of Additional Addresses:

  • 0x161cdd891e04a77e0458a3ef65c563c4d2064cd6
  • 0x27158157136384c713bc09a0a7ae81c8391d7f11
  • 0x2b1b1e27a50afd4929f773c7eed2d1cea1c964c8
  • 0xa3e95aeb9f284e44f23efd2298aee71221a0c91b
  • 0xc059a1ffe290de70f4dca3333e5aecf3d3746b03
  • 0xdad22a85ef8310ef582b70e4051e543f3153e11f

With the exception of the last address in the last above (#6), all of the addresses are ones that were not publicly known / listed by the Chainlink team (for whatever reason).

A cursory glance at the transaction history for each of the addresses above shows that there has been a pattern of distribution and liquidation by the $LINK team spanning back to pre-2018 (see below for a brief screenshot of wallet 0xc059a1ffe290de70f4dca3333e5aecf3d3746b03, for example):

Information on the Addresses Above

Each one of the addresses above sent $LINK to the $LINK recipient address that we isolated in this section (0x1f9e26f1c050b5c018ab0e66fcae8e4394eb0165).

The extraction of this information was facilitated via the use of the CSV export function provided by Etherscan

In total, this address has received 16,033,348 million $LINK tokens (approximately +4 million more than what was sent from the fourth $LINK development address that we isolated)

Additionally, the Extra Addresses We Isolated Have Not Liquidated SOLELY At Our Primary Recipient Address For Dev Wallet Number Four

Again, using wallet 0xc059a1ffe290de70f4dca3333e5aecf3d3746b03 as our reference (one of the five additional wallets we uncovered), we can see that there are a significant number of $LINK that have been liquidated from these wallets in other locations as well:

All Liquidation Paths Lead to Binance

We're going to expound upon this later on in the token movement analysis (transactional), but for this section - we will use the screenshot above as a direct example.

Bringing Up the Prior Screenshot For Reference

Remember when we mentioned that there were five additional wallets that we discovered sending $LINK to the recipient address for the fourth dev address listed by the $LINK team? (From the Glassnode Analysis)

Well, it turns out that, among those five additional wallets (which all have been liquidating $LINK), those wallets themselves also have additional liquidation points (apart from 0x1F9E26f1c050B5C018AB0E66FCAe8e4394eB0165).

Taking a Look at 0xc059a1ffe290de70f4dca3333e5aecf3d3746b03

One of the five additional liquidation addresses that we identified for the fourth dev wallet's recipient address = 0xc059a1ffe290de70f4dca3333e5aecf3d3746b03 .

Taking a look at the wallet's transaction history, we're going to identify one specific alternative address where $LINK were sent to (see below):

Alternative Address

The alternative address in question here = 0x2b1B1e27a50aFD4929f773c7eed2d1Cea1c964c8

Curiously, there are a number of transactions from this wallet that end up back at that main recipient address that we identified earlier (each of those outgoing $LINK transfers are boxed in red):

Random Transaction Tracing

One random transaction that caught out attention (in this wallet address), was the following:

[link = https://etherscan.io/tx/0xbbaeae5711116231cfe5d3394b8ff8733230146e5dadf6e19badde8efd5726858]

The 97k $LINK tokens, in specific, were sent to this wallet address: 0xa6c9c5162e199f13a1244e2b12d55abd0835ad10 (with no transaction history outside of that one TX that entered into the address before being sent out approximately two days later):

Here is the TX for the outgoing 97k $LINK transfer: https://etherscan.io/tx/0x68e95d8c06719a5f71ce50ee54fdd1a290f3d6a72467112710ef4a0fce931168

Final Destination = Binance Deposit Address

Those 97k $LINK tokens referenced above were transferred directly to a Binance deposit address (which appears to still be very active at the time of writing).

See Below (please note, this is just a screenshot of all of the $LINK-specific transactions):

How We Can Tell This is a Binance Deposit Address

Each incoming transaction into the wallet is immediately scraped out (in an outgoing TX), to Binance's exchange - which is classic deposit wallet address activity (for any exchange).

There are also no outgoing transactions to any other entities apart from Binance (yet another tell-tale sign that the address in question is 'owned' by Binance - created on behalf of a customer - with that customer being $LINK).

Turns Out This is a Really Active Wallet Address

Let's look at some of the 'normal' transactions going in and out of this wallet address:

Above, the 1,000 Ethereum liquidation ($250k worth at the time of transfer), can be seen entering the wallet no more than 17 days prior to the time of this on-chain transaction analysis report (TX occurred on July 3rd, 2020).

USDT Transfers Are Interesting as Well

Perhaps equally as interesting as the $ETH and $LINK liquidations is the total in USDT that has been liquidated at Binance by the $LINK team (see below):

In just the screenshot above, we can see $1.1 million worth of USDT that was liquidated on Binance in the last month alone (from the time of writing ; today's date = July 21st, 2020).

Scrolling a bit further down, we can see several additional USDT liquidations on Binance exchange (each occurring circa 30-32 days ago):

In the screenshot above, there is over $2 million worth of USDT that we can see being sent to Binance's exchange.

Origin of the USDT?

Currently unknown.

We're also not certain why the $LINK team would be sending millions of dollars worth of USDT to Binance either.

Also, its worth keeping in mind that this only represents one of the $LINK team's side wallets (we have already identified five on the basis of the fourth development wallet, alone).

Continuing the Research

There is a substantial amount of additional on-chain transactional analysis that must be done in order to get a fuller picture of the $LINK team's liquidation habits (and approximate amounts).

However, based on what we know now (and have covered above), in can be stated that the $LINK team:

Has liquidated tens of millions of dollars worth of $LINK (and other related / accrued assets from $LINK) since their inception.

It appears that the pattern of liquidation by the $LINK team follows that of obfuscation. Again, to be clear - we're stating that this is what it appears to be, not that this is what it is.

It is hard to ascertain rhyme or reason for any of the liquidations by the $LINK team.

Based on all observed destination points for liquidation by the $LINK team, it appears that Binance is the sole / primary exchange where funds are liquidated for the $LINK team.

It is likely that there is no entity in the blockchain space that is entirely aware of how many resources the $LINK team possesses in terms of raw funds or how much the $LINK team has liquidated thus far (out of their coffers).

This is more than likely due to the fact that the total number of wallets that the $LINK team owns is currently unknown. This goes to our statement above where we asserted that the pattern of liquidation appears to follow that of obfuscation (i.e., transactions crafted in such a way as to make an on-chain transactional analysis like this one exponentially harder than it would otherwise have to be if the liquidation patterns were transparently listed).

Moving Forward

There are several additional points of analysis that need to be conducted (we still haven't gotten to 'Ethtective' yet ; although bloxy.info may serve as a suitable substitute if Ethtective is having trouble providing us with a concrete path to liquidation for the $LINK token from the $LINK wallets that we have already identified thus far).

Our preliminary analysis of the liquidation destination points strongly indicates that Binance is the only real liquidation source for the $LINK team at the time of writing.

We look forward to diving further into this analysis in the near future with additional addendums to this report that shell out more of the $LINK team's transactional landscape.

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