The trading of the MYX token, the cryptocurrency associated with the MYX decentralized exchange (DEX), exhibited signs of market manipulation, according to a report by AI infrastructure firm Rena Labs and market intelligence company Insider.Cash.
The analysis reviewed over 9,200 minute-by-minute data points from Sept. 9 up to Monday, uncovering 249 trading irregularities related to illiquidity, volume spikes, price ratios, and trade intensity.
Researchers observed a 433% increase in MYX liquidity anomalies on the Gate exchange on Sept. 9, with 32 instances of illiquidity reported on Sunday and Monday. This suggests either deliberate market manipulation or the withdrawal of market makers, who are essential for maintaining liquidity and stabilizing markets in times of extreme volatility.
Average trade sizes for the MYX token decreased by 67% during “peak” illiquidity phases, and trading frequency dropped by 45% in the observed timeframe, plummeting to 86 trades per minute from 157. Meanwhile, bid-ask spreads narrowed to 8.2% on Monday, down from 15.8% on Sept. 9.
Related: What is MYX Finance and why has it surged 1,400% in a week?
Bid-ask spreads, which represent the difference between buying and selling prices, usually widen during periods of low liquidity and contract when liquidity is high. The unexpected behavior of bid-ask spreads during peak illiquidity raised concerns for the researchers. They stated:
“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.”
Representatives from Rena Labs informed Cointelegraph that the chance of all anomalies occurring across the four market dimensions—illiquidity, volume spikes, price ratios, and trade intensity—happening simultaneously was under 0.001%, effectively indicating that organic trading activity is “a mathematical impossibility.”
Cointelegraph tried to contact MYX Finance for a comment but did not receive a response prior to publication.
BubbleMaps raises concerns over MYX token airdrop
On Sept. 9, the blockchain analytics platform Bubblemaps asserted that the recent MYX token airdrop might have been the target of the largest Sybil attack in crypto history.
A Sybil attack involves a malicious actor creating numerous accounts controlled by a single entity, creating a façade of genuine network activity.
Bubblemaps reported that a single entity, managing 100 newly funded wallets, acquired over 9.8 million MYX tokens, resulting in a $170 million profit from the token airdrop.
Magazine: What do crypto market makers actually do? Liquidity or manipulation?
