Examining ETC Following 51% Attack
On January 5th, Coinbase noticed irregularities indicating that ETC was experiencing a 51% attack. Here we present the on-chain transactions activity surrounding the event.
Given this news, it is interesting to see that the price of ETC has remained relatively flat. Examining on-chain transactions data through a proprietary analytical framework available at Boltzmann, reveals that a significant amount of ETC has migrated from wallets that resemble long-term cold storage to wallets that resemble exchange hot wallets. While ETC price has yet to reflect the nature of demand shock that we assume would most likely be precipitated by a double spend attack, on-chain transactions data suggest a future price decline is likely.
As noted in a recent analysis, redistribution of the stock of a network’s asset bear significant implications for price. Boltzmann has created three flow constructs to understand how a network’s asset stock is redistributed over time. Source-Sink Flow monitors the flow of assets from wallets that behave as network sources to those wallets that behave as network sinks. Pipe-Pipe Flow monitors the flow of assets among wallets that behave as network intermediaries. Sink-Source Flow monitors the flow of assets from wallets that behave as network sinks to those that behave as network sources.
Figure 1 shows a 2,350% increase in Sink-Source Flow for ETC since mid-December. This dynamic is particularly stark when considering the historical trend, which has been flat in absolute terms and relative to other crypto assets.
We interpret this event primarily as an exogenous event that could weaken demand for the Network’s asset.
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