Yakuni reacted to Lumpy in The Jed Attack
(1/2) - 22 February 2020
Although never confirmed by Jed McCaleb, the "tacostand" XRP wallet (rEhKZcz5Ndjm9BzZmmKrtvhXPnSWByssDv) is well-known to belong to him.
A quick look at the wallet and its transactions (https://bithomp.com/explorer/rEhKZcz5Ndjm9BzZmmKrtvhXPnSWByssDv) and you will quickly notice that Mr McCaleb manages his funds following a very strict routine. Every morning at 08:02 UTC, 1.7M XRP are sent to another wallet.
The so-called wallet, activated by Jed, is then "in charge" of selling the XRP. A rigorous routine is also in place. Wait 09:00 UTC and you will see on the ledger the first "create offer". Offer that is usually selling 1M XRP for USD Bitstamp (IOU).
Keep an eye on the XRP:USD.Bitstamp orderbook and you will see that the order is algorithmically managed. The price (exchange rate) of the limit order is, if needed, constantly adjusted. As an example, last Thursday (2020-02-20), the limit order was canceled and re placed 13 times.
Jed aims to sell the XRP. The more the offer is at the edge of / at a competitive price on the orderbook, the more chance it has to be filled.
However, this Saturday morning, 22 February 2020, Jed's automated bot sold 1.7M XRP for ... $188,456 USD, meaning that it sold at an approximate XRP:USD price of ... 0.11 USD. The price this Saturday morning being around 0.271 USD.
The candle below highlights the magnitude of the slippage.
Details of the transactions:
A trade has two participants, a buyer and a seller. Selling at a discount of 0.59% means that an individual (or group of individuals) made approx 270,000 USD of profit this morning. Luck or Jed's bot generosity is not, as you guess, the explanation of the dramatic event.
The attacker (https://bithomp.com/explorer/raBmhBNmYFGe5hJ5Gez2MbpNspewctCAGv) has been preparing his/her/their coup de grâce. Although only successul today, the attacker has been groping for the flaw. Transaction activities of the wallet indicate that the wallet has been active on the XRP:USD.Bitstamp trading pair for at least two months.
The wallet sold this morning around 1M XRP, cleaning all the liquidity / depth of the bids of the orderbook, then placed the first killing order (1) that Jed's bot decide to take, then the second killing order (2). Jed's bot also hit the bid for the latter.
The attacker does not act alone. Sub-wallets 1 (https://bithomp.com/explorer/rHjzw8L2ZBNhLfWw3yv8AY1hf1QYnRMriR) and 2 (https://bithomp.com/explorer/r9ujfsgebDGPEoQP7WFYcVrhEKQZPKVGd7), activated by the one mentionned above, looked like to have specific roles. Mostly create counter orders, allowing front running kind of strategy.
To be continued...
Many interesting unanswered questions:
- What was the specific technical flaw the attacker took advantage of?
- What is the profitability of the attack? (taking into account potential front running costs - previous tests / iterations before finding the flaw)
- Will the attack repeat itself tomorrow? / Had Jed noticed the event?
(2/2) - 25 February 2020
Yes. As you can see below, the attack was repeated every day since the first successful attempt.
More active market participants during the week than the weekend has probably a positive impact (less slippage) on Jed's bot loss, although today's data indicate that the attacker had a +10% discount on the XRP bought.
When yesterday, on Monday February 24th, many bids populated the orderbook, therefore reducing the potential slippage and the arbitrage gain, the attacker does not seem to be discouraged. The malicious wallet even sent few payments with some interesting memo (here below) to push for more cooperation...
Cooperation that was indeed tried, successfully or not, in the past. Look at the memo below regarding a payment sent early January.
A payment got some echo (payback, as a sign of approval for cooperation?) on at least one receiver. Please note that the client description below recalls some other events (https://email@example.com/hi-renier-8f887aee027b).
John Nash would have been proud. Even in a decentralised exchange the concept of game theory can stand. Memo can support text messages, allowing market participants to communicate with each other and therefore, look at decision not in isolation but as being part of different interactions.
As regards Jed's bot flaw, it seems that the algorithm takes decisions based on:
the distance to the best ask: replacing the order to make sure that it is at the edge of the ask side the bid ask spread the volume depth of the bids: Jed's bot hits the attacker bids (in all examples), meaning that Jed's bot decides to hit the bid if the slippage is not too important and if a tight spread (mentionned above) is true Note that the above are assumptions and educated guesses. Digging into the transactions is probably the best way to know more about it.
I am quite surprised that (my assumption) there is no outside / off ledger element Jed's bot relies on. For instance, the XRP:USD spot price of another (liquid) market, making sure that the decision to place an order on the ledger at x price is not irrational compare to the latter. The best for that being probably the BitMex XRP:USD spot index (https://www.bitmex.com/app/index/.BXRP).
Yakuni reacted to ManBearPig in Charting the course of XRP
Do you get the same feeling when you get in line at the grocery store and come to the realization that you picked the slowest line, so you move to the other line. Then they open up a new checkout lane and you rush to that one but not before being beat by Momma Cass and her semi-weekly 300 dollar loaded cart. Now your ice cream is beginning to condensate and your worried the milk might be getting too warm. To top it off, you just realized you forgot the mango salsa you always wanted to try.
The point is, don’t make it too complicated. Diversify, buy the dips, and Hodl.
Yakuni reacted to aye-epp in Are you just holding (and waiting) or are you also actively taking advantage of XRP?
Does this make XRP or fiat the failure?
Yakuni reacted to jMusic in Charting the course of XRP
I wish I could understand human nature better. Can someone sensible explain why (a few) posters come onto what is clearly a TA thread to bash and be negative towards Molten when it's very clearly stated in the title and the subsequent content what the thread would address. It's like dealing with 3 year old children. Assuming these snowflakes are not toddlers with advanced computing or smart phone skills, why do they behave like this...what do they gain from pissing on someone else's chips ? Constructive criticism is one thing, this is something entirely different. Clearly there are psychological deficiencies that are being over-compensated for resulting in the trolling behaviors we have to tediously endure.
It's really very simple, if TA is not your thing - don't read a TA thread. If you really feel so inadequate that you must post your 'enlightened' opinions then start your own anti-TA threads away from here and stop diluting this excellent thread.
Yakuni reacted to Julian_Williams in Charting the course of XRP
I am sorry @XRP_to_20dollars - it is respect for you that suffers when you make such malicious uncalled for remarks. Molten is providing an excellent commentary that is very much appreciated by many thoughtful less hotheaded members of the forum
Yakuni reacted to Caracappa in Charting the course of XRP
Well, thank you for your opinion. I would advise you to not click on this thread if you dislike it so much, and especially if you have the uncontrollable need to vent to others you don't like it time after time. It is pointless and just your opinion. (This is not investment advice)
Others, myself included do like it to read his interpretations, wrong or right. And actually, some of his recent calls were pretty accurate. And indeed, others wrong.
In the end for most of us it is for entertainment. I'm not placing my trades based upon someone else's TA.
Yakuni reacted to RipplingAlong in Charting the course of XRP
Tell me why you are so negative about him? Is he's girlfriend prettier than yours?
Or might it be that you have very limited experience and knowledge on charts and investments in general and envy him?
What is it to you to try and down talk someone who puts a lot of effort in to try and add value and give insight on market development?
I evaluate each post he makes and some I gain more from than other, similar to any other person that posts here. Your posts add absolutely nothing with these remarks. Please refrain from making posts like "Wrong again. Lol". You are just making yourself look worse than you already do. If you disagree with something, give concrete and logical reasoning therefore. This can actually add value and stimulate critical evaluating thoughts and stimulate constructive conversation.
Otherwise please just leave all together if you want to be the kid.
Yakuni reacted to Julian_Williams in Panel with Asheesh Birla @ 2020 Goldman Sachs TMT
A lot of this is about BTC dominance
AB 5.00 last week 7.5% of US dollar to Mexico cross border vol
AB 10.20 advert for XRP use case, it is going to be very hard to dislodge XRP from its dominance of its niche
AB 12.16 development of protocols
AB 16.30 not bullish on lightening. (guy on his left is very keen on lightening as a layer 2 solution to BTC layer 1 problems of scalability and speed)
General: Digital is not just about speeding up present processes - it is about inventing new uses
AB 21.00 digital asset gets rid Intermediaries and new countries can be added to the network in weeks.
General: Blockchain gets rid of intermediaries
Trying to predict what disruptions will emerge from blockchain tech
AB 25.50 talking about meeting Bitso for the first time and the impact this has had pushing out big banks in the space of just a few months.
General; about cars that own themselves, have crypto wallets and buy their own petrol etc. Machines become autonomous
AB 34.00 Regulation UK and Singapore doing better than US which is lagging
Yakuni reacted to JASCoder in Charting the course of XRP
An excellent notion Julian. I do think the we'll see this confirmed to be the case; as the affect of ODL's demand for trading and moving XRP strengthens.
Ripple's metaphor of a flywheel is most apt.
Not only are flywheels slow to spin up, but hard to stop. And as a gyroscope demonstrates, hard to push it away from its current course.
And thanks for the kind words. I'm just pleased to find some peers here to interact with
Sadly, I've ZERO in my small pool of family and friends whom have the patience and interest to indulge me in listening to my enthusiastic babble about crypto, and XRP.
But you know what ?
I've been there before...
Back in the 80's I tried to share my excitement with the new tech known as "computer graphics." And how it would be a big deal.
Then in the mid-90's I was actually patronized over my exuberance of this new fangled whatever thingie called the in-TER-net. And how it was gonna impact EVERYTHING, and greatly surpass the MIGHTLY AOL behemoth.
I actually had one business owner tell me the Internet was only good for finding nudie pics (as digital scanning was just becoming available, and of course its usage quickly found its way to USENET, gopher, and ftp sites). SMDH.
WIth XRP, are still very very early
Yakuni reacted to Julian_Williams in Charting the course of XRP
@JASCoder I I wrote a few weeks ago your arrival on XRPchat was the best news. What you are writing here is subtle and very perceptive, and adds a new understanding to how ODL will contribute towards maintaining the price gains of XRP. I wonder if we can imagine XRP being pulled up by BTC gains and then not losing them with BTC losses, the opposite to the present situation where we are not being pulled up much on BTC gains and losing a lot on BTC losses.
ODL is doubling every month, so we will have 4 times as high ODL in mid April, maybe at this level the effect of ODL would be substantial.
An effect like this could cause money from other follow-the-latest-trend investors in ALT coins to transfer to XRP, and we get a perfect investment storm developing
Yakuni reacted to JASCoder in Charting the course of XRP
I would not word it that way.
Those red bars were quite high volume at-market sells, over an 18 minute span (three minute tic's). But note the wicks, how the Taker's replacement offers are actually ABOVE the event's starting price, some even higher !
NOT the actions of a typical speculator.
The MM isn't trying to accumulate on the cheap, but has a purpose.
As Julian said above, this is utility in the wild. Remember, ODL is relentlessly performing trades and transfers, and pounces on arbitrage opportunities when they appear, which lowers their operational cost average..
The VIG, or juice, which is funding this arbitrage-driven churn of tokens and fiat capital, is coming out of the pocket of the remittance customers. They're paying for the slippage and the exchange's withdraw fees (which btw, gets cheaper the higher the volume).
Hope that helps