Yesterday, the Ethereum blockchain saw two suspicious transactions: a single, unmarked address unknown by the crypto public sent two transactions both with a transaction fee of 10,668 ETH during a 16-hour time span.
The first transaction, which cost $2.5 million, sent $130 of value. And the second, which also cost $2.5 million, sent $87,000 worth of Ethereum.
The transactions were immediately flagged as likely mistakes, presumably caused by a bug in the wallet software used by the mysterious transaction sender.
While this story quickly grabbed headlines, another address made the same mistake, paying an extremely high transaction fee that is exponentially higher than the status quo. This time, analysts postulate that the Ethereum transaction may be related to a hack.
THIRD ABSURD ETHEREUM TRANSACTION SENT IN 24 HOURS
Around 24 hours after the second $2.5 million fee transaction, block explorers and individuals noticed another suspicious transaction: A user spent over $500,000 to send 3,200 ETH, worth around $750,000.
One of Primitive Ventures’ founding partners Dovey Wan, a notable crypto commentator, remarked in reference to the blockchain data pertaining to the transaction:
“WOW another abnormal ETH transaction with over 2K ETH fee just emerged, following the previous two incidences each with over 10K ETH fee.”
From Bitcoinist’s look at the transaction data, the address that sent this latest transaction had nothing to do with the single address that sent the last two high-fee transactions.
This raises the question: what happened?
According to Wan, there’s a good chance that the address pertinent to this transaction was hacked. She wrote:
“A wild guess [is that] a certain exchange/wallet/Ethereum services is being “kidnapped” by a hacker… The hacker can move the coins but only to a list of certain addresses which are whitelisted (or other unknown constraints), hence by [wasting the assets they can pressure the] exchange to settle with a ransom.”
A cryptocurrency researcher corroborated this, writing that the transactor, revealed to be mining pool MiningPoolHub, was “probably hacked.”
This is decisively different than the previous two suspicious Ethereum transactions, which were effectively deemed by the community to be caused by a bug. As The Block’s Larry Cermak postulated:
“This is from the same address with the same exact fee in ETH (10,668.73185). This reinforces the theory of a bug and points to it not being fixed yet.”
Associate professor of computer science at Cornell University Emin Gün Sirer guessed that the bug likely swapped the intended transaction amount with the transaction fee, resulting in a 10,668 Ethereum fee spend instead of a 10,668 ETH transaction.
PART OF A WIDER TREND OF HIGH FEES
Although these transactions are clear outliers, they highlight one of Ethereum’s issues over the past few weeks: high fees.
ETHGasStation shows that gas prices are currently 30 Gwei, approximately six times higher than they were around the end of April. While this means that a regular Ethereum transfer only costs around $0.150, fees rapidly increase to dollars if you want to interact with Ethereum-based smart contracts.
Such high fees may prevent the adoption of certain smart contracts on the blockchain if there are not scaling solutions.