Using on-chain tools and analysis to enquire about potential wrongdoings on MultiversX blockchain. Babayaga, ChatGPT et al. May 2023, 10p. Disclaimer: This document was made by private individuals for the sake of documenting facts that are recorded in the MultiversX blockchain, thanks to its amazing properties of transparency and permanence. The data included in the following paper is of public access, for anyone with an internet connection. It could be easy to throw accusations or make quick judgment calls based on the results. But one must remember that the analysis only looks at wallets, not people. When one analyses the transactions on-chain, one can just describe facts. One does not assess the motivations of the individuals who initiated those transactions. This doesn't prove bad intent or manipulation. Only a proper investigation based on legal grounds can. It must be based on various fields of expertise, as on-chain analysis just provides some pieces of a bigger puzzle. Nevertheless, the Do Your Own Research (DYOR) is a big deal in crypto. So please consider this paper as us DYORing and raising some potential flags. 1. Introduction Blockchain is so powerful in terms of transparency. All the data stored on the blockchain is public and can be accessed by anyone on the network. Each transaction that takes place on the blockchain is recorded in a block, which is then added to the chain of blocks that make up the blockchain. Each transaction on the blockchain is verified and authenticated by multiple participants on the network, ensuring that the data stored on the blockchain is accurate and tamper-proof. The transparency of the blockchain is important because it allows for trust to be established between participants on the network, even if they do not know each other personally. By making all transactions and data public, the blockchain ensures that everyone on the network is playing by the same rules and can hold each other accountable. Nothing from the past could be altered or hidden. It's always there, for anyone to see. Once you start looking into a blockchain explorer you'll realise it's one of the ultimate mindgame. So let's dig, blockchain diggers! 2. The reason why Let's say you've been told that a project is a scam ( 🥚 🐟 ) Let's say, you've even heard that 2-3 shady projects originated from the same person/group of persons. ( 🦉 ) Let's say your Cryptotwitter feed is often full of those accusations and not-so-politely formulated tweets and you are somehow tired of the image this gives to the MultiversX ecosystem and its community... Let's say, you are interested in blockchain explorers, APIs and on-chain analysis. Then, with a bit of time and commitment, you could try to document the relations between some wallets, trying to see what the blockchain says about those projects/persons. 3. The data and tools used for this analysis For this research, only basic tools were used. The MultiversX explorer is the basic source of information on the blockchain, where you can access wallets, herotags, transactions, holdings...: https://explorer.multiversx.com/ When a user creates a wallet on the MultiversX platform, they are assigned a unique address, which serves as a public identifier for their wallet on the blockchain. Users can then send and receive digital assets to and from their wallet by sharing this address with other users or services on the platform. Digital assets on the MultiversX blockchain can include cryptocurrencies, non-fungible tokens (NFTs), and other digital tokens or assets. Herotags on the MultiversX blockchain refer to unique identifiers that users can create to represent their digital identity. The MultiversX API which allows to send request and receive real-time detailed and specific information for further processing: https://api.multiversx.com/ An API, or Application Programming Interface, for the MultiversX blockchain is a set of programming instructions and standards that allow developers to interact with the blockchain and build applications on top of it. The MultiversX API provides a range of endpoints and functions that developers can use to access and manipulate data on the blockchain. These functions can include things like querying the blockchain for transaction data, submitting transactions to the network, and retrieving information about users, assets, and other elements on the platform. Excel and Googlesheets are commonly used software and services. Those tools were used for basic processing of API requests outputs (sorting wallets, check relations, detailed tx analysis...) Linking Excel with the API allows users to always have the up to date of the data. Xtools is an online service developed by Upong, a dev from MultiversX community. It allows retrieving quickly some basic information from the API. It was used to zoom quickly on some wallet relations before making a more in-depth analysis: https://xtools.fr/ Excalidraw , was used to visually illustrate the relations between wallets. It allows also to provide hyperlinks to the wallet explorer, detailing the corresponding wallets and some relevant tx. https://excalidraw.com/ 4. Some findings ? The main outcome of the research is a mapping of transactions and interactions between wallets and the documentation of underlying direct transactions. The following figure summarises those relations, as per May 2nd, 2023, date of last data processing. Figure 1: Overall map of the analysis All weblinks (wallet and tx) could be accessed directly from the following Excalidraw webpage: https://excalidraw.com/#json=Qvyqd8nAR-uuHymmZdfEO,TgRnp1j0za7_1o5XTGVdYA We know what you think... But bare with us, you’ll see it’s pretty simple. Part 1. From the owl to the caviar Let’s start with the wallet with the herotag @ihbou https://explorer.multiversx.com/accounts/erd1dfxheram7ervcy9m2lp5frvkv6yv54j4j2960498e nc4pl8m324spwxvgj This wallet is making a damn lot of transactions, so it’s an active member of MultiversX community and it pays fees and contributes to the use of the MultiversX blockchain... @ihbou has the most interaction with another wallet; herotag @juusss (154 tx to, 144 tx from) The wallet @juusss was originally funded by a transfer from @ihbou just after its creation in July 2021. https://explorer.multiversx.com/transactions/476d1f4124062d4980eb9d1eef68947b57e9379 61003e442d437fbae7a6ecc95 The data also shows that the wallet with the herotag @ihbou has direct link with a project wallet @caviareggs https://explorer.multiversx.com/accounts/erd1u56jnt0l5sw6f92swd4eshyfchsr48sqrdh4tfxptay w6e42vfnsvdez3m This is the wallet of a project called XCaviar which organised raffles based on the Xcaviar tickets: collection TICKETS-9c4d16. Currently this project sells XcaviarNFTs(collection CAVIAR-759c05) which are described as “ Energy-charged NFT by xExchange connected to xMex with weekly Metabonding rewards and swap fees shared between xCaviar holders ” :) The creator of this NFT collection is @Juusss. The branding request on Github for Caviar was committed by the user named ihbou on Github. https://github.com/multiversx/mx-assets/pull/1279 In fact before April 24, 2023, @caviareggs is the second wallet that @ihbou have more interacted with, as there were: - 115 tx from @ihbou to @caviareggs (including the one tx that originally funded this wallet just after its creation in May 2022), https://explorer.multiversx.com/transactions/2c3af61862e6c3c17442a1f9090b37c57d 8e55100955a44b761f7f415443177b - 57 tx from @caviareggs to @ihbou One could also note that the direct exchanges between @caviareggs and @Juusss are also numerous with 67 and 28 tx, (in and out between those two) Another related wallet is Erd...puek , It was originally funded from a tx sent from @ihbou on October 2022. https://explorer.multiversx.com/transactions/4215a5304bd0fc1acdc206463cad3bf3e702ab0e 673ad959ead1bcd8f1ecaf0d and it has direct tx to and from @caviareggs, @juusss, @ihbou. That leaves us with a first part of the scheme, a group of four wallets, @ihbou and three wallets directly funded by @ihbou at their birth, all of them with direct interactions between each others. (And yes it could just be a group of friends, young brilliant entrepreneurs who boldly initiated a successful project called XCaviar...) Figure 2: Relations between @ihbou, @caviareggs, @juusss and Erd1...puek Part 2 - Who will win the lottery ? With this ground established we can now get into another layer by analyzing the relations of those wallets and others, focusing on the activities related to other projects wallets. The wallet with the herotag @web3lottery is the wallet of an active project which is using the blockchain functionalities to run a lottery based on selling NFT tickets (collection TICKETS-a61370) and rewarding users with NFTs from well-known collections. https://explorer.multiversx.com/accounts/erd1aymr9p6plwu28wr7qmjqatgcp0th6nvspqj742w 7en973mvk6p2qa6zvst The @web3lottery wallet was registered on May 19, 2022. On May 21, 2022 it received 5 millions LKFarm from @Many69 and 35 millions LKFarm from @caviareggs on May 25, 2022. https://explorer.multiversx.com/transactions/04db0a75721aef5e560c7cd8885d45648c443f0e 42e398974e29706de763bc48 The @web3lottery wallet has also direct transactions with: - @juusss - @ihbou https://explorer.multiversx.com/miniblocks/eee1d48fb258a4741327569fd095bff59ec216784f 2887cf0a4dc129df674890 Numerous direct transactions also exist between the wallets @ihbou and @many69. Figure 3: Relations between @caviareggs, @web3lottery, @ihbou, @juusss and @many69 (So yes it could just be a group of friends, young brilliant entrepreneurs who boldly initiated a successful project called XCaviar and then help launching or promoting another project called Web3lottery...) In a tweet published by XWeb3 Lottery on 2023 April 30, the winners of some @elrondMafia NFTs have been announced. This distribution was actually implemented with 10 NFTs sent from @web3lottery wallet! Congrats to the lucky winners ! Among which: @ihbou, https://explorer.multiversx.com/transactions/207dc5699749a75c64e1152f7c14a57922 b59dfda96b2b51bf89e261f589691c @juusss, https://explorer.multiversx.com/transactions/5bba15788805815f62c883519a05aa8f9c 54a46413f6cca222b6daaf6106409f @many69 , https://explorer.multiversx.com/transactions/67fa8bce86127e37a4252de57511ac7464 cc82a0e8935ca08dcff3ba6e3eacbe Erd...puek, https://explorer.multiversx.com/transactions/8903b2366245d85e7f7b67817e35f37f798 d24211c7e28a6478a683f3313485f But it’s not forbidden to be lucky or involved in a project. Not sure the original meaning of #Allfortheclan was that one though. Some other wallets have numerous interactions with @web3lottery (even some whales) but are not shown here in the analysis, as they do not show the pattern of directly exchanging with the original group of wallets of interest. They seem to be the ‘regular users’ of the lottery. We wish them all the best in this world and to be lucky and safe. Part 3 - The flat tax ! Once you continue digging into this dense web of transactions and wallets you’ll see that many recurrent addresses are somehow “shared” between this group of wallets. Most of them show an interesting pattern. They haven’t been registered with a herotag and they’re being used mostly for transiting (exiting) funds towards Centralised Exchange (CEX) such as Binance, Kucoin or Crypto.com In case of needs and in line with the KYC policies of CEX, it is likely that some of those wallets could lead to actual registered person(s) IRL. Such wallets are: - Erd...y34 , https://explorer.multiversx.com/accounts/erd1s4dgykl60qac539afatxuzm9tz5rcvec0z3rgwgn whdq93mnq7wqem9y34 This wallet received EGLD tx from @ihbou, @caviareggs and @web3lottery (Nov. 2021- Apr. 2023) and was mostly used to send EGLD to one Kucoin EGLD hotwallet. This wallet was originally funded by @ihbou on November 11, 2021. https://explorer.multiversx.com/transactions/cfe85790d46a4585670cbe73c2a296abad3646b 24e13212638f5b18a68e0320c -Erd...48w, https://explorer.multiversx.com/accounts/erd14fa9lfh6ndnkrza4s3pwkn86ytfvr3k8yrskge9pc9 exc4s7y72szxl48w?page=1 This wallet received EGLD tx from @ihbou, @caviareggs and @juusss (Feb. 2021 to Apr. 2023) and was mostly used to send EGLD to Crypto.com EGLD hotwallet. - Erd...w35, https://explorer.multiversx.com/accounts/erd1hl8lrfahsdpmzgkt4q4fsux9jrufcan7kn0qfu4vxe9 enuk20feskx3w35 This wallet received EGLD tx from @Many69, @ihbou, and another “common wallet” including tx in from @caviareggs (Aug. 2022- Mar. 2023) and was mostly used to send EGLD to Crypto.com EGLD hotwallet. Figure 4: EGLD outflows to CEX through “common wallets” Conclusion So now let’s be clear ! None of the previous elements is a “proof” of scam, bad intent or behaviour. It’s not an holistic assessment, so some connections may be missing. What we could state however is documented and numerous interactions exist between a group of wallets in close connection with @ihbou and the project Xcaviar. This group of wallets is also strongly linked with the project XWeb3 lottery, somehow involved in its creation but also as users/winners of the project. 🎲🎟 The authors couldn't find a reasonable justification to use such moneyflows between those wallets when you operate a sensible and responsible web3 project, nor why common wallets are used for exiting liquidity to CEX. But no speculation, there could be obvious reasons, just unknown to us. This data could be considered as preliminary result and a start if the community wants to add to it. To go further it would make sense to dig a bit more on the inflows/outflows of the Smartcontracts used. It would also make sense to quantify the moneyflows, as the current analysis only focused to highlight the existence of the transactions and the patterns of operations. To go further it would also be of interest to go beyond the on-chain analysis. Looking at the results of some Twitter giveaways organised by the projects would be a good start for example... The authors were only focused on on-chain analysis. They were happy to unveil a bit of its power and magic while providing you with some elements to make your own opinion. Yet, doing so they felt a bit nauseous from the somehow murky waters they explored. Personally, they will try to stay out of investments and projects related to the owners of those wallets and would advise all readers to make their own judgment based on the facts highlighted in this paper. This paper could also be a chance for the project team(s) to elaborate on the questions it could have raised. Web3 is a wonderful land, populated with apes, unicorns and magicians but there’s also necromancers and very dark forests. Not Financial Advices, just stay careful out there, behave and take care of each others! All we have is our community. доверяй, но проверяй !