A blockchain analysis by Nansen researchers highlighted ether (ETH) and stablecoin outflows from centralized exchanges following the FTX crash.

Nansen research analyst Sandra Leow posted a post on Twitter dissecting the current state of decentralized finance (DeFi), with a particular focus on the flow of ETH and stablecoins on exchanges.

Currently, the Ethereum 2.0 deposit contract contains more than 15 million ETH, while the WETH deposit contract holds about 4 million Wrapped ETH. Web3 infrastructure development and investment firm Jump Trading holds over 2 million ETH tokens, making it the third largest ETH holder in the ecosystem.

Binance, Kraken, Bitfinex, and Gemini wallets feature on lists of the largest ETH balances, while the Arbitrum layer 2 rollup bridge also holds significant amounts of ETH.

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

The recent debacle of FTX may also cause users to worry about holding assets in third-party custodians such as centralized exchanges. Leow highlighted the reality that the safety of funds held on exchanges may not be guaranteed:

“The phrase is amplified, ‘not your keys, not your tokens,’ which is especially important in times like these.”

According to Nansen’s trade flow dashboard, Jump Trading stood out because of its high withdrawals from the exchange compared to deposits. Leow suggested some possible reasons for Jump Trading’s token movement, noting the company’s exposure to liquidity hub Serum (SRM) tokens:

“As they were affected by the FTX fallout, they had to offload some tokens from exchanges that needed liquidity. Over the past 7 days, we have seen Jump Trading withdraw ETH, BUSD, USDC, USDT, SNX, HFT, CHZ, CVX and various other tokens.”

There has also been a significant outflow of ETH from some major exchanges over the past 7 days. $829 million worth of ETH flowed out of Gemini accounts, while $797 million worth of ETH was transferred from Upbit’s accounts. $597 million worth of ETH was withdrawn from Coinbase, while Bitfinex also withdrew about $542 million worth of ETH from its platform.

The past week has also seen a large number of stablecoins being withdrawn from exchanges. $294 million worth of Stabelcoins flowed from Gemini, while Bitfinex saw $173 million flow from its platform. KuCoin and Coinbase followed suit, withdrawing $138 million and $108 million in stablecoins from the two exchanges, respectively.

Leow also analyzed the movement of stablecoins, telling Cointelegraph that outflows usually indicate that users are on the sidelines and that capital is not flowing into the cryptocurrency space:

“Perhaps, market contagion and a prolonged bear market has reduced traders’ interest in actively investing and participating in the space.”

Nansen was instrumental in providing key insights into major ecosystem events in 2022. The blockchain analytics firm dug into on-chain data to piece together Terra’s May 2022 crash.

It then followed with a deep dive into the FTX debacle, with evidence of collusion between the exchange and crypto trading firm Alameda Research. Both companies were founded and controlled by Sam Bankman-Fried.