FUNToken (FUN) suffered a sharp decline following sales from wallets linked to the Binance hack. At the time of writing, FUN is trading at $0.0032859, down 62.10% over the past 24 hours. In the Uniswap pool used by the attacker, the decline exceeded 90% at one point.
The gap between the broader market price and the price in that particular pool highlighted the importance of liquidity. Selling into the small FUN/WETH pool pushed its price down much more sharply than on other trading platforms.
Attacker sold 134.1 million FUN
According to an analysis based on Etherscan data, a wallet labeled “Binance Hot Wallet Exploiter 2” transferred 714.9 million FUN to a new address at 11:28 p.m. UTC on October 29. Three minutes later, the receiving address began selling through the decentralized exchange Uniswap.
The wallet executed more than 150 sales over the following hours. One transaction went through PancakeSwap, while the rest took place in the FUN/WETH pool on Uniswap v2. The final sale was recorded at 4:17 a.m. UTC on October 30.
In total, the address sold 134.1 million FUN for 111.5 ETH, worth approximately $250,000. Based on an earlier valuation shared by Joshua Frank, co-founder and CEO of The Tie, the tokens sold had a paper value of around $1.17 million.
The attacker therefore captured only about 21% of that estimated value. As the sales rapidly drove down the price, the gap widened between the displayed value of the wallet’s holdings and the amount that could actually be recovered through selling.
Small liquidity pool accelerated the decline
According to GeckoTerminal data, FUN’s price in the pool used by the attacker fell from approximately 0.0000037 WETH to 0.00000017 WETH. That represented a decline of more than 90% in that particular trading pool.
The reported figures put the pool’s total liquidity at around $16,000 after the sales. Roughly half consisted of FUN, with the other half held in WETH, a tokenized version of ether.
Uniswap pools operate differently from the buy and sell orders used on centralized exchanges. When a user deposits FUN into the pool and withdraws WETH in return, the balance between the two assets changes, and the price adjusts accordingly.
The smaller the pool, the greater the price impact of selling. FUN’s collapse in this particular pool therefore does not mean the token lost the same percentage of its value across every platform.
The latest price display puts FUN’s 24-hour trading range between $0.0024415 and $0.0088741. Although its price of $0.0032859 is above the daily low, the 62.10% decline illustrates the scale of the selling pressure.
Wallet still holds 580.8 million FUN
The address reportedly retained 580.8 million FUN after the sales. According to Etherscan data, that amount represents approximately 5.4% of the token’s maximum supply. The possibility of those remaining holdings returning to the market is one of the main risks being monitored.
Frank had previously valued the attacker’s FUN holdings at approximately $6.23 million. That was equivalent to 252% of the token’s reported daily trading volume.
Daily trading volume alone, however, does not show how effectively a market can absorb a large sale. In FUN’s case, the liquidity of the specific pool and the concentration of sales over a short period played a decisive role in the price movement.
Following the developments, the FUNToken team asked centralized exchanges to temporarily suspend FUN deposits as a precaution. That request, however, did not prevent sales in the relevant Uniswap liquidity pool.
Other small tokens also face pressure
According to the on-chain analyses shared, wallets linked to the Binance hack also held smaller-market-cap tokens including PROM, RSR, RED, OGN and GTC, alongside FUN. The attacker reportedly sold some of these assets through Uniswap and PancakeSwap.
The developments show that the impact of the attack extends beyond the total value of assets taken from the exchange. For tokens with limited liquidity, the amount of stolen assets that remains transferable and the speed at which those assets are sold can have a significant effect on prices.
For FUNToken, which traces its origins to the FunFair project launched in 2017, attention has now shifted to the remaining holdings. The large amount still in the wallet suggests that renewed selling could keep the token’s price under pressure.
