Trading of the MYX token, the cryptocurrency of the MYX decentralized exchange (DEX), featured hallmarks of market manipulation, according to a report from AI infrastructure company Rena Labs and market intelligence company Insider.Cash.
The report analyzed over 9,200 minute-by-minute data points between Sept. 9 and Monday, which found 249 trading anomalies regarding illiquidity, volume spikes, price ratios and trade intensity.
The researchers found that MYX liquidity anomalies on the Gate exchange spiked by 433% on Sept. 9, with a total of 32 illiquidity events on Sunday and Monday, signaling either intentional market manipulation or the exit of market makers, which provide liquidity and cushion markets during times of extreme stress.
MYX token average trade sizes contracted by 67% during periods of “peak” illiquidity, and trading frequency also fell by 45% during the observed trading period, falling to 86 trades per minute to 157, while bid-ask spreads contracted to 8.2% on Monday from 15.8% on Sept. 9.
Related: What is MYX Finance and why is it up 1,400% in seven days?
Bid-ask spreads, the difference between buy and sell prices, typically widen during heightened illiquidity and contract when liquidity is high. The “paradoxical” behavior of the bid-ask spreads during peak illiquidity was also a red flag for the researchers. They wrote:
“The temporal synchronization of these extreme deviations across otherwise independent market microstructure metrics strongly suggests coordinated, multi-vector manipulation strategies, rather than organic trading activity driven by fundamental news or natural market forces.”
Spokespersons from Rena Labs told Cointelegraph that the likelihood of all the anomalies across all four market dimensions — illiquidity, volume spikes, price ratios and trade intensity — occurring simultaneously was below 0.001%, effectively making the likelihood of organic trading activity “a mathematical impossibility.”
Cointelegraph reached out to MYX Finance but was not able to receive a response by the time of publication.
BubbleMaps sounds the alarm on MYX token airdrop
On Sept. 9, Blockchain analytics platform Bubblemaps claimed that the recent MYX token airdrop may have been the subject of the largest Sybil attack in crypto history.
A Sybil attack is a type of malicious activity in which the threat actor creates multiple accounts that are all controlled by a single entity, giving the impression of organic network activity.
Bubblemaps said that one entity, controlling 100 newly funded wallets, claimed over 9.8 million MYX tokens and made a $170 million profit from the token airdrop.
Magazine: What do crypto market makers actually do? Liquidity, or manipulation