Nexo attestationsAssessing the state of the other crypto lenders is difficult due to a general lack of transparency. However, Nexo provides daily attestations through the accounting firm Armanino.
By accessing previous data through the Wayback Machine, we find that Nexo has experienced outflows equivalent to 58,478 BTC since May 12th, with withdrawal activity rising over the weekend following twitter threads by otteroooo later addressed by Nexo. The growing withdrawals suggest that users of crypto lending platforms are getting more cautious amid the growing uncertainty in the market, leading to a bank run and a vicious feedback loop for lending platforms, which already experience massive pressure pending the unresolved 3AC contagion.Nexo has said that the firm had zero exposure to Three Arrows, but they are the only lending provider following a proof of reserves methodology through daily attestations provided by Armanino and is thus a great source for examining the high temperature in the crypto lending market.
Source: Nexo, Armanino, WebArchive (Wayback Machine)
The contagion and bankrun is evident everywhere in the lending marketThe increased withdrawals are not an isolated Nexo or Voyager case. It happens across the entire lending market. BlockFi’s CEO Zac Prince announced on the On The Brink podcast that BlockFi had experienced withdrawal volumes in the week after the 3AC liquidations of greater than 10% of their overall balances while noting that the withdrawal volume was softening last week. In addition to offering a line of credit to Voyager, FTX/Alameda has also offered a $250m line of credit to BlockFi. Morgan Creek Digital, who have participated in BlockFi’s seed A through D fundraising rounds, have responded by attempting to raise $250m in equity capital to BlockFi, noting that the credit line could enable FTX to buy BlockFi at essentially zero price. Hodlnaut co-founder JT also announced net outflows of 35% of their AUM over recent weeks in a twitter thread.