Anchor Protocol: How the dev team rigged liquidations

Tried to engage the dev team on this for a month with no response. Would like an official answer now.

All code used is open sourced and the data is reproducible. I would specifically like the dev team to explain how their liquidator is doing these frontruns if they are an honest actor

https://throwaway0xfr.github.io/frontrun_analysis.html

Questions, comments, criticism and especially a rebuttal is very welcome

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This is not a great look for TFL in that there was seemingly no public announcement about this change when they initiated it and only came clean about once they were challenged.

How are the team going to do better in terms of transparency going forward?

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I’m surprised that this hasn’t been addressed yet. It’s a bit over my head in technicality, but it hasn’t gotten much response from people either supporting the claim or denying it.

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I think mostly people realized that by May/June, a lot of the selling pressure on Luna from Anchor liquidations at 30% premium has been avoided by the fact that TFL front ran the bids.

It’s far from ideal in terms of fair access to the Liquidation contract and transparency, but I don’t see evil intentions like the headline of this thread suggests.

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I am going to challenge this narrative by Anchor Protocol and TFL that liquidators crashed the Luna price. Here is the volume from that time.

From May 18 - 22 Luna price crashed from $15.74 to $3.98 and the total trade volume of those days 5 days is $3.872 billion.

The total bLuna liquidated from Anchor inception to date is ~13M Luna, with TFL liquidating half of that. The total bLuna liquidated until the end of May was 6M with TFL liquidatin 60%+ of it.
https://finder.extraterrestrial.money/columbus-4/anchor/liquidators

This argument that a couple of million Luna sales crashed the price during a period of 3.872 BILLION USD in volume is ridiculous. The fact that it was officially used by Anchor Protocol, @dokwon and @ryanology045 to demonize decentralized liquidators is sad, but using the same false narrative to make unilateral, secret decisions that changes how the protocol fundamentally operates is frightening.

Decentralized liquidators also didn’t cause “cascading liquidation” because Anchor uses Band oracles which will ignore the tiny terraswap volume in favor of the massive CEX volume.

If you told me that a platform with 0.5x leverage caused cascading liquidations while FTX offered 100x leverage, I wouldn’t believe you without even looking at the data.

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Thanks for the thorough write up. This is concerning but even more disturbing is the lack of response from TFL.

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…Can you explain your acronyms - What is TFL?

Terra fu**ing Luna I believe.

Terra Form Labs. The company

blatantly obvious second order effect when there is only one liquidator in the game

TFL’s liquidator out of cash, and all other liquidators went to protocols that don’t privilege one liquidator over others

@HarpoonProtocol what’s your thoughts on this. Your plan should help decentralized it better right? What’s the ETA?

I would like to see this issue adressed as well.

*push

Is there any update on this situation?