Crypto wake-up call: Researcher explains exodus of ETH from exchanges

On-chain analytics show that ETH and stablecoins left centralized exchanges following the collapse of FTX.

Blockchain analysis by a Nansen researcher highlighted outflows of Ether (ETH) and stablecoins from centralized exchanges following the collapse of FTX.

Nansen Research Analyst Sandra Leow posted a Twitter thread outlining the current state of Decentralized Finance (DeFi), with a particular focus on the movement of ETH and stablecoins from exchanges.

As it stands, the Ethereum 2.0 deposit contract contains over 15 million ETH, while some 4 million wrapped ether (wETH) is held in the wETH deposit contract. Infrastructure development and investment firm Web3 Jump Trading holds over 2 million ETH tokens and is the third largest ETH holder in the ecosystem.

The current state of DeFi in @nansen_ai charts

The Binance, Kraken, Bitfinex, and Gemini Wallets feature in the largest list of ETH balances, while the Arbitrum Layer 2 Deployment Bridge also holds a significant amount of Ether.

As Leow explained in correspondence with Cointelegraph, the percentage increase in ETH held in smart contracts can be seen as an indicator of the flow of ETH into various DeFi products. This includes decentralized exchanges, staking contracts, and custodial services.

The recent collapse of FTX may also have raised fears among users holding assets with third-party custodians, such as centralized exchanges. Leow highlighted the reality that the safety of funds held on exchanges may not be guaranteed:

"There's amplification for the quote, 'Not your keys, not your coins,' and that's especially important at times like these."

According to Nansen's Exchange Flow Dashboard, Jump Trading stands out as an...