What explains $2.5bn Anchor withdrawals over a few hours?

Between 20:00 7 May 2022 and 02:00 8 May 2022 UTC around $2.5bn of deposits were suddenly withdrawn from Anchor. What explains the move and where is the money now?

https://grafana.luigi311.com/d/7j96rRI7z/anchor

  1. Around the same time BTC dropped 4%, which is not an unusual for BTC, although it was hitting a new low. If people are losing money, getting margin calls, they might withdraw from Anchor to raise funds. Is this explanation sufficient? Seems a bit random.

Interestingly, UST market cap didn’t move much vs the $2.5bn Anchor withdrawal. This means UST was withdrawn from Anchor, but wasn’t burnt / sold or there were enough buyers of UST to balance the selling.

  1. Why would someone withdraw from Anchor, but then keep UST in their wallet? I discount this explanation.

  2. So why were there suddenly buyers for roughly $2.5bn UST? And they didn’t burn it, so what did they do with it? We know they didn’t put it back into Anchor. The money sitting on Curve is c. $600m from what I saw, so that’s not where it went…

there is at least one account here (credit to narco78), which is sitting on $277m UST, just sitting in wallet, not put to work even though it would earn a daily interest of $137,000 on Anchor.

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People are allowed to do with there UST as they wish. People don’t always act on incentives. Maybe they decided enough was enough and they dont want to risk having it on anchor anymore. Most likely they also don’t want to lose money on slip so are witing for 4pool liquidity and then will probably trickle it out. If I had 277m i would be in no rush to do anything with it until certainty is back in the markets.

Anchor doesnt control user deposits and its fine to have it pulled. Jump is backstopping UST like they did wormhole so I have full confidence of UST peg at this point.

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are we still feeling this way? :sweat_smile:

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yeah lol, I dont let fear and greed in markets control my emotion. Picked up a big bag of pluna recently too.

gotta have deep pockets for crypto.

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It’s a shame that I’m back here to witness these circumstances unfold exactly as we’ve talked about for months.

We’ve been banging on about this exact situation that’s been building. I am so disappointed that this was allowed to happen. Throwing sound risk management practices under a bus in the pursuit of growth at any cost.

We were talking about locking up UST for preferential yields 6 months ago. What happened there?

What did people think was going to happen when the peg started to go offside? Was it really a surprise to see after allowing $14BN to just run for the exits? This was just the result of a panic that could have been avoided.

It also displayed the fragility of the system, having VC’s and third parties armed at exchanges with massive clips of USDT defending the peg so that LUNA wasn’t exposed to do it’s actual job. Was this really what people signed up for? It seems it’s was all about pumping the price of LUNA and nothing else mattered.

The decentralized reserves was a great step forward, but it was too little and too late after throwing the fundamentals of risk management out of the window.

At this stage I have no idea if the VC’s backing this thing have any appetite to throw more capital at it.

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You got out exactly at the right time. Smart money.

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Yeah I guess I was pretty informed about the situation, but it’s sad to see so many lost money. 10, 20, 30% or more for some and it need not have happened.

You can’t call them panic sellers since it was a textbook bank run. I have read that some people actually took their lives… No idea if this is true.

People trusted Anchor and everyone involved in high level decision making at TFL and Anchor needs to be held accountable.

What I was seeing across the exchanges and on social media was an embarrassment.

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This will not go down well here, but people have been railing against the very institutions of traditional finance that are trying to protect them. They wanted crypto, they got crypto.

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I don’t think they got crypto. They got stiffed by a bunch of cowboys and VC’s who solely cared about lining their own pockets.

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