Chia Network Sends Third Round of XCH from Strategic Reserve to Market Maker


As announced on Discord, Chia Network has sent XCH from the prefarm (Strategic Reserve) to their engaged market maker. This 50,000 XCH transaction marks the third round of transactions from the prefarm, totaling 300,000 XCH sent in total.

Blockchain Analysis

As with previous transactions from the prefarm vaults, any spends from the US or Swiss warm wallets is met with a 24 hour clawback period. The initial move of 50,000 XCH into a clawback coin happened at Feb 1, 2024 23:35:41 UTC, and the sweep to its final destination happened almost exactly 24 hours later at Feb 2, 2024 23:38:03 UTC. As of time of this article, the market maker has not made further moves of the 50,000 XCH.

Coin spends of the third transaction of 50K XCH to the market maker. Source: All The Blocks

Interestingly, there are some differences with this transaction compared to the previous two. Notably, the destination address xch13x0...26ja is different than the first two transactions that were sent to xch1pzv...v6qw. This in itself could be simply explained by a different derivation address but it could also mean a separate wallet controlled by the market maker.

Purpose of Transfer

It was noted in Discord that the majority of this transfer from the prefarm will be sold over time, in the same way as portions of the previous transfers. (Called it!)

Source: Chia Discord Server, Feb 1 2024

Future movements by the market maker may offer insight as to the frequency and magnitude of these XCH sales on behalf of the Chia Network but thus far they seem to be small enough to be relatively unnoticed by the market.

Recall that as stated in the Chia Business Whitepaper v2, Chia Network expects revenue to come from three main sources: billing enterprise customers, interest from loans, and appreciation of the prefarm from creating demand for block space. The first two revenue streams have been realized and real world blockchain adoption is already underway. It would be in the interest of Chia Network to see that any XCH sales do not adversely impact the valuation of their balance sheet.

Source: Chia Business Whitepaper Version 2.0 – February 2, 2022

Track the Prefarm Yourself

Chia Tracker detailed view of one of the prefarm warm wallets.

Besides the official Prefarm Audit Tutorial, you can stay on top of any movements of the prefarm with a new feature from Chia Tracker to track vaults (Vaults are the custody solution that secures the prefarm and they will soon be integrated into the reference wallet for general use).

Chia Tracker offers a service that can automatically track and notify you of transactions to and from your wallet (or another wallet). It is also useful to generate downloadable records of your transactions for tax reporting purposes.

Otherwise, subscribe to or follow me on X @SlowestTimelord for further updates on market maker and prefarm movements.

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