After the notorious drug market Hydra was shut down final yr, competitors rapidly occupied its place.

(Colin Davis/Unsplash)

10 Years of Decentralizing the long run

Shutdown of the once-dominant darknet marketplace Hydra in 2022 changed the marketplace for medication and other illicit goods. In line with blockchain analytics firm Chainalysis, blockchain data reveals most of the darknet vendors quickly switched from Hydra to another market, OMG!OMG!, the firm stated in a brand new report.

The wallets that previously interacted with Hydra started transacting with OMG!OMG! wallets, and since then greater than half of OMG!OMG! revenue would come from former Hydra shoppers, Chainalysis mentioned. This might be a sign that Hydra operators have been concerned in OMG!OMG!, too.

The two platforms also shared the same methodology of drug delivery: Buyers obtained geographic coordinates for the packages they bought, which had been hidden in parks and different areas prematurely.

After Hydra

Hydra used to be essentially the most successful marketplace for medicine, counterfeit documents, cash laundering and other illegal items and companies in the world, although its customers were mostly in Russia and neighboring international locations. The platform provided crypto money-out services and even announced an preliminary coin offering (ICO) of its own token in 2019, however that never happened.

In April 2022, the U.S. included Hydra’s crypto wallets into its sanctions list. German legislation enforcement shut down the platform and seized 543 bitcoin in its wallets, price about $25 million.

Several rivals picked up the slack after Hydra: OMG!OMG!, Blacksprut and darknet market Market. All three used the identical bunch of deposit addresses at a "high-danger change with a heavy presence in Russia," Chainalsysis said.

Another blockchain intelligence firm, TRM Labs, earlier mentioned that within the eight months since Hydra’s collapse, other darknet marketplaces received $820 million in crypto.

Since Hydra’s collapse its opponents have been preventing for dominance, which sometimes took extravagant forms: Vice reported that one drug market, Kraken (not to be confused with the crypto exchange), parked a bus painted with its emblem in the center of Moscow. It also put an advertisement on a building in Moscow; OMG!OMG! did the identical.

In May, instantly after Hydra’s closure, OMG!OMG! grabbed over 50% of complete market share though it later suffered a distributed denial of service (DDoS) attack and lost its dominant place to Mega Darknet Market and Blacksprut, Chainalysis says. Blacksprut was also attacked at one time. There are recognized cases of darknet platforms attacking each other with the assistance of employed hackers, such as the KillNet group, Vice reported.

Revenues down

The downfall of Hydra led to a whole market revenue decline, Chainalysis says. In 2021, total revenue of darknet outlets (largely drug dealing websites) was $2.6 billion; in 2022, it fell to $1.Three billion. Average each day market revenue fell from $4.2 million earlier than Hydra’s closure to $447,000 instantly after, Chainalysis says.

Closure of one other drug marketplace, Bypass Shop, which has been reportedly shut down by Russian authorities, additionally contributed to the general decline. However, the drug retailers' income has been slowly recovering because the second half of 2022, Chainlaysis wrote.

That was not the case for web sites selling illicit goods aside from medicine, resembling stolen private data - their fortunes continued to go down. For example, Brain Dumps was the most important shop for stolen banking data in 2022, but for unknown reasons its income fell virtually to zero in October, Chainalysis said.

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Anna Baydakova was CoinDesk's investigative reporter with a particular focus on Eastern Europe and Russia. Anna owns BTC and an NFT.