Suspected Dragonfly Address Transfers 137 Million SKY to Coinbase
A suspected address linked to Dragonfly Capital has transferred 137 million SKY to Coinbase, currently valued at approximately $9.05 million.
This position was withdrawn from Binance in August 2021, when it was valued at $20.45 million, and has since halved in value.
As an early-stage crypto VC, Dragonfly is processing old positions through exchange channels, shifting funds from long-term holding to liquidity realization, putting pressure on SKY holders and the protocol governance.
ABAB AI Insight
Dragonfly Capital, focused on early-stage crypto investments, heavily invested in DeFi projects during the peak of the 2021 bull market, including the MakerDAO ecosystem. They have previously managed old assets through similar addresses and gradually exited during liquidity windows.
In terms of capital flow, Dragonfly is transferring SKY acquired at high prices in 2021 to institutional channels like Coinbase Prime, motivated by the need to lock in some liquidity to support new fund deployments or LP returns, reallocating resources from old DeFi governance tokens to current high-potential sectors.
Similar to Paradigm and a16z gradually reducing early DeFi holdings during the 2022-2023 bear market, this move indicates that Dragonfly is transitioning from heavy positions in the previous cycle to lighter positions in the new cycle.
Structural judgment: This essentially represents capital concentration. Old positions acquired at high valuations are being liquidated through exchanges during the bull-bear transition, concentrating funds back into the new generation of infrastructure and application layers. The mechanism is that VCs need to maintain IRR and respond to LP redemption pressures, driving industry resources from old protocols to new narratives.
ABAB News · Cognitive Law
After the old positions have halved, smart money cashes out first before re-entering.
When the liquidity window opens, those with the longest holding times often escape first.
The cost of early heavy positions is deciding whether to sell or hold when value returns.