Aster’s $100 billion business volume was ‘suspicious’. But was it wrong? – DL News

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Decentralized exchanges offering perpetual trading are taking the crypto industry by storm.

Hyperliquid has seen a perpetual trading volume of $2.8 trillion since its launch about a year ago. Even more notable, a competitor named Aster appears to be closing the gap: in September, it overtook Hyperliquid in terms of daily trading volume.

Or did he?

DefiLlama, a DL News sister company, delisted Aster’s perpetual volume over the weekend, citing its failure to verify whether there were fictitious trades on the platform.

“Aster reports very, very high criminal volumes – to the tune of $100 billion,” 0xngmi, the pseudonymous manager of DefiLlama, told me Monday. “So it’s a little suspicious.”

Generally, this is not a problem. Blockchains allow anyone with an Internet connection to verify and consider suspicious data.

Many decentralized trading platforms experience a number of wash trades, a form of market manipulation in which traders trade with themselves in order to create the false impression that a particular token is taking off. This, in turn, can attract other traders who want to profit from this false hype.

Although this practice is frowned upon, crypto systems are open and verifiable, allowing data providers like DefiLlama to filter out fake transactions.

0xngmi cited Hyperliquid, Arbitrum-based exchange GMX, and Solana-based exchange Raydium as places to verify such activity.

“In the case of GMX, everything is Arbitrum, so you can just go to Arbiscan and see the transactions, or you can run an Arbitrum node and see the transactions,” 0xngmi said.

But DefiLlama cannot run an Aster node because Aster does not provide the required software, he added.

Aster did not immediately respond to a request for comment.

Perp DEXs allow traders to speculate on cryptocurrency price movements without an expiration date and with massive leverage.

Hyperliquid has dominated the sector this year, but a revamped airdrop campaign propelled Aster to first place last month.

The newcomer is backed by YZi Labs, a family office led by Changpeng Zhao, the former CEO of Binance. Zhao used his star power to promote his investment in Aster.

YZi Labs did not immediately return a request for comment.

The exchange provides data via an API. But using this data is like taking Aster at its word, according to 0xngmi – a no-no in the crypto industry, where verification is the gold standard.

DefiLlama’s decision to remove the Aster Perpetual Volume has drawn criticism and support. Supporters said they knew all along that Aster’s volume was false — an accusation that goes too far, 0xngmi told me. Although the huge volume raises questions, proving that this is the result of wash trading would require additional data that Aster has not yet provided.

“We don’t really have any data to back it up,” he said of the claim that Aster’s perp volume was completely false.

And then there were the critics, who were happy to accept the numbers Aster provided.

“It’s a point of view,” 0xngmi said. “But that makes DefiLlama a lot less useful than if he were a little more opinionated, you could say.”

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Aleks Gilbert is DL News‘ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.