Decoding why a halted DEX on Elrond Network sent ELGD rolling down a slope

Yesterday, following the detection of a “set of suspicious activities”, Maiar Exchange (Maiar Dex) a decentralized exchange deployed on the Elrond Network, was placed under maintenance.

Beniamin Mincu, Founder and CEO of Elrond in a tweet put out earlier today confirmed that his team already launched an investigation into the suspicious activity detected on Maiar Exchange and would provide an update soon.

Speculating on the nature of the suspicious activity detected, users of the platform believe that it might be an “exploit of the Maiar Dex or SC async calls” through the detection of a way to “hide some transactions/call funds out of nowhere” on the network.

At press time, Maiar was offline as its website could not be assessed. Immediately following the downtime, both the Elrond Token (ELGD) and Maiar’s Native Token (MEX) suffered a serious decline in price.

Let’s take a look at performance in the last 24 hours.

Price Reactions

Immediately the Mincu confirmed the announcement and informed users that the Maiar exchange had been placed under maintenance, and the ELGD lodged a 7% decline in price. It marked a low of $71 minutes after Mincu’s tweet went up. In the last 24 hours, the token was spotted registering a 5.10% decline. At press time, the token exchanged hands at $73.21.

Source: Coinmarketcap

Toeing a similar path, the MEX token was severely hit with a 90% loss in price minutes after the exchange went offline and the same was confirmed by Mincu. The token went from an index price of $0.0000881 to 0.0000094 within minutes after Mincu’s tweet went up.

Although a retracement followed pushing the price upwards, the token still managed to record a 4.47% decline in the last 24 hours. At press token, this token sold for $0.00008556 per MEX token.

Source: Coinmarketcap

Although recording a 221.33% jump in trading volume in the last 24 hours, the decline in price and the position of the Relative Strength Index (RSI) for the ELGD token hinted at an increased selling pressure at the time of writing. The RSI stood at 36.53 below the 50 neutral region. 

Source: TradingView

With the price marked by a long candle stick, the RSI for MEX was spotted resting deeply in an oversold position of 13 at press time. In the last 24 hours, the trading volume declined by 35.36%.

Source: TradingView

On-Chain Analysis

On-chain data revealed that in spite of the price decline observed in the last 24 hours, and the downtime on one of the platforms hosted on the Elrond Network, the development activity of the ELGD maintained its high position. It was stationed at 72 at the time of writing.

Source: Santiment

Similarly, on a social front, the Social Volume of the ELGD token saw an uptick in the last 24 hours. It was spotted at 19 at press time. Social Dominance on the other hand suffered a 16% decline.

Source: Santiment

With the exchange still down over 12 hours after it was taken offline, the investor’s confidence might be hard to restore when it comes back online.