Impact of Black Swan Events on Ethereum blockchain ERC20 token transaction networks

Abstract

The Ethereum blockchain and its ERC20 token standard have revolutionized the landscape of digital assets and decentralized applications. ERC20 tokens are programmable and interoperable tokens, enabling various applications and token economies. Transaction graphs, representing the flow of the value between wallets within the Ethereum network, have played a crucial role in understanding the system's dynamics, such as token transfers and the behavior of traders. Here, we explore the evolution of daily transaction graphs of ERC20 token transactions, which sheds light on the trader's behavior during the Black Swan Events – 2018 crypto crash and the COVID-19 pandemic. By using the tools from network science and differential geometry, we analyze 0.98 billion of ERC20 token transaction data from November 2015 to January 2023. Our analysis reveals an increase in diverse interaction among the traders and a greater adoption of ERC20 tokens in a maturing Ethereum ERC20 financial ecosystem after the Crypto Crash 2018 and the COVID-19 pandemic. Before the crash and the COVID-19 pandemic, most traders interacted with other traders in an isolated or restricted manner, with each trader focusing solely on either buying or selling activities. However, after the crash and during the pandemic, most traders diversely interacted among themselves by participating in both buying and selling activities. In addition, we observe no significant negative impact of the COVID-19 pandemic on user behavior in the financial ecosystem. © 2024 Elsevier B.V.