・Theory

Wallet addresses are a fundamental part of the way cryptocurrencies work. Every time someone sends or receives a digital asset, they do so using a unique wallet address that acts as a sort of virtual post box. This address allows the transaction to be securely recorded on the blockchain, where it can be verified and confirmed by other users.

One way that wallet addresses can be used to track money flow on the blockchain is by using a blockchain explorer. These allow users to search for a specific wallet address and see all of the transactions that have been associated with it. By looking at the transactions associated with a particular wallet address, it is possible to get a sense of how much money has been sent and received, and where it has come from or gone to.

Another way that wallet addresses can be used to track money flow is by using specialized analytics software. This software can be used to create visualizations of the flow of funds on the blockchain, allowing users to see how money is moving between different addresses and transactions. This is another use case that Footprint supports:

This schematic chart shows money moving into and out of Binance in the last 7 days. We see that over $9 million was transferred from market maker Wintermute to the Binance exchange.

This can be particularly useful for tracking money flow on centralized exchanges, where large amounts of money are often traded back and forth. By analyzing the wallet addresses associated with these exchanges, it is possible to get a better understanding of how they operate and where the money is coming from and going to.

・Diversity of blockchain implementations

・BTC

Transactions in Bitcoin work by transferring ownership of the digital currency from one person or entity to another. When a transaction is made, it is broadcast to the network and included in a new block of transactions, which is added to the blockchain.

・EVM native tokens

Ethereum is a public blockchain network that uses the Ethereum Virtual Machine (EVM) to enable anyone to run any program, regardless of the programming language given enough time and memory. The EVM makes it possible for developers to create smart contracts and decentralized applications (dapps) on the Ethereum platform.

Different EVM chains may have different features and use cases, but they all share the core properties of blockchain technology, such as decentralization, security, and the ability to run smart contracts and dapps.

・ERC20 and others

ERC20 tokens are a type of digital asset that runs on the Ethereum blockchain. They are designed to be used by decentralized applications (dApps) and smart contracts on the Ethereum network, and are created in accordance with a set of rules called the ERC20 token standard. This standard defines a common set of rules that all ERC20 tokens must follow, which makes it easy for dApps and smart contracts to interact with them in a predictable way.

The ERC20 token standard is specific to the Ethereum blockchain, and as such it is not applicable to other blockchain networks that use different technology. However, other blockchain networks may have their own standards for digital assets that are similar to ERC20 tokens in some respects. For example, Binacne smart chain uses a different technology and consensus mechanism than Ethereum, and as such does not support the ERC20 token standard. Instead, Binance Chain has its own standards for digital assets called BEP20. BEP20 tokens are similar to ERC20 tokens in that they are digital assets that can be used by dApps and smart contracts on the Binance Chain network, but they are not directly compatible with ERC20 tokens.

・Practice

In this part, we’ll look at querying examples for several popular examples. All requests imply the use of the footprint.network site - to go to the constructor, you need to go through the following steps:

1. Click on Create and select New chart.
   
   Create chart using UI drag-and-drop interface
2. Once selected, the constructor will be opened:
   
   Query constructor
3. Once all tables are successfully loaded, you can proceed to the following chapters (see the subsections of this section)

・How to query a wallet address balance?

As part of our platform, we combine balances from all networks within one table. In the following example, we will analyze the method of obtaining a balance using Ethereum as an example:

1. Search for the table called address_token_balance
   
2. Select it from the list of the results. Once it is selected, the data will be previewed just like on the following screen
   

3. Access the Advanced view

4. Press the Filter button

5. Select Chain as a column to be filtered by and enter “Ethereum”

6. Select Token Symbol as a column to be filtered by and enter the token name (USDT, for instance)

7. Select Wallet address as a column to be filtered by and enter the wallet address

8. Sort from latest check to the earliest

9. Limit result to one so that only the last check result is returned

10. As a result, you will have something like this:
    

11. Click Visualize. By default all data is visualised in the form of the table. In this particular case only one transaction will be returned (as transactions’ hashes are unique)
    
12. You have successfully queried the data that you have been searching for!

・How to query a provided transaction?

・BTC

1. Search for the table called bitcoin_transactions
   
2. Select it from the list of the results. Once it was selected, the data will be previewed just like on the following screen
   

3. Access the Advanced view

4. Press the Filter button

5. Select HASH as a column to be filtered by

6. Insert the hash of the transaction you are interested in

7. As a result you will have something like this:
   

8. Click Visualize. By default, all data is visualised in the form of the table. In this particular case only one transaction will be returned (as transactions’ hashes are unique)
   
9. You have successfully queried the data that you have been searching for!

・EVM

The following example will be based on Ethereum :

1. Search for the table called ethereum_transactions
   
2. Select it from the list of the results. Once it was selected, the data will be previewed just like on the following screen
   

3. Access the Advanced view

4. Press the Filter button

5. Select hash as a column to be filtered by

6. Insert the hash of the transaction you are interested in

7. As a result, you will have something like this:
   

8. Click Visualize. By default, all data is visualised in the form of the table. In this particular case only one transaction will be returned (as transactions’ hashes are unique)
   

9. You have successfully queried the data that you have been searching for!

・ERC20 tokens

The following example will be based on Ethereum:

1. Search for the table called ethereum_token_transfers
   

2. Select it from the list of the results. Once it was selected, the data will be previewed just like on the following screen
   

3. Access the Advanced view

4. Press the Filter button

5. Select transaction_hash as a column to be filtered by

6. Insert the hash of the transaction you are interested in

7. As a result, you will have something like this:
   

8. Click Visualize. By default, all data is visualised in the form of the table. In this particular case only one transaction will be returned (as transactions’ hashes are unique)
   
9. You have successfully queried the data that you have been searching for!

・Case study

Coindesk’s release of Alameda’s private financial documents on November 2nd caused the biggest collapse in crypto history. As a result, 140 million FTT flowed to Binance and the token’s value dropped from $26 to below $2. This triggered a run on FTX and a supposed “hack” that drained $473 million from the reserves, all leading to the declaration of bankruptcy by the world’s second largest trading platform.

・Summary of events

On November 2, Coindesk released Alameda’s private financial documents. On November 6, Binance founder CZ announced that Binance would sell off all FTT coins on its books in the coming months. Alameda CEO Caroline Ellison offered to buy all of Binance’s FTT holdings at $22, which caused FTT to experience its first sharp drop of 10% before returning to $24. On November 8, FTX International suspended withdrawals, causing FTT to plummet to $5. Binance announced on the same day that it might be interested in acquiring FTX, but the acquisition was terminated on November 11. Later that day, FTX filed for bankruptcy and users’ funds disappeared.

Between November 6 and 8, the price of FTT plummeted from the $20s to under $5.

・Could the collapse be predicted?

Before the collapse of FTX became imminent, there were several on-chain signals that indicated trouble ahead. On November 5, 75 million FTT were transferred off FTX, indicating a sell-off after the release of Alameda’s financial documents. Two major dumps of FTT occurred on November 8 and November 13, with around 110 million and 211 million FTT being sold off respectively.

Footprint Analytics - FTX-FTT Transactions & Amount

From November 2 to November 8, more than 140 million FTT tokens were transferred to Binance. The jump in transaction volume occurred on November 5 and November 6, with around 45 million and 42 million FTT tokens being transferred on those days respectively. This indicates that many users were moving their FTT tokens to Binance during this time period.

This bar chart shows a massive influx of FTT being transferred to Binance, indicating an exodus of capital from the formerly second-largest exchange.

It is reported that more than $1.4 billion has drained from FTX’s Ethereum balance.

Footprint Analytics - FTX Ethereum Addresses Netflow (11.1-11.7)

FTX’s major tokens balance dropped significantly. This was reflected on the precompiled dashboard: