Decentralized exchanges (DEXs) have been gaining significant attention in the cryptocurrency market due to their decentralized and transparent nature. However, the prices of many tokens on DEXs are extremely volatile, which to some extent makes DEXs into chaotic, frequently arbitraged, and scam-ridden markets. Social media platforms play a crucial role in the dissemination of information about token projects and have become popular sources for traders to discuss their opinions on the market.
Existing research suggests that social media has a significant impact on the price of cryptocurrencies on centralized exchanges. Compared to centralized exchanges, DEXs have fewer users and lower liquidity, which makes token prices on DEXs more volatile and susceptible to be affected by a small number of powerful opinion leaders from social media.
This project aims to test this hypothesis and identify the influencers on social media platforms that impact the price of tokens on DEXs using network science methods. In addition, as the price on DEXs is determined by the reserves of two tokens in a liquidity pool, this project also aims to identify abnormal on-chain transactions and activities on DEXs that are triggered by social media information.