Santiment has reported on Twitter an anomalous transaction involving the Yearn Finance (YFI) token, amounting to over 2500 YFI.
Many had mistaken it for an attempt by a whale to liquidate the accumulated funds, but this was not the case because all the addresses involved were related to an exchange, namely Binance.
The transaction was executed on November 7th, 2020 and saw 2546 YFI moved from the Binance address to Binance 7, one of the many addresses managed by the exchange to keep the funds separate.
Hence, we are not in the presence of unknown people or whales, but a simple relocation of funds, most likely for security reasons.
The Yearn Finance transaction
Interestingly, almost $40 million were moved, and the transaction only required a $1.39 fee.
When checking the distribution of these tokens then we see that:
- 6455 YFI are involved in governance staking;
- over 5600 YFI are in Binance’s hands;
- 2346 YFI are in the Aave pool;
- 836 YFI are held by the Huobi exchange;
- 797 YFI in SushiSwap;
- 313 YFI in Uniswap.
Governance tokens on exchanges
From this data we can see how, no matter how decentralised a project may be, most of the tokens are in the hands of the exchanges which, as this transaction shows, can influence the protocol, especially in the case of Binance which, with its volumes, would be able to pass votes or stop them without problems.
In fact, with the governance tokens of the various projects, there is always the problem of managing them and centralizing them, as it is possible to use them, just like it happened to Maker DAO last March.
Moreover, it is worth noting that exchanges, including Binance, have already interfered with another protocol in the past, namely Steem, and helped Justin Sun.