Gas prices have surged on the Ethereum network this week, going over 500 gwai at one point, before stabilizing to 56 gwai. Because of this, the average transaction has become $0.49, making it more expensive to transact with cryptos on Ethereum, even compared to its blockchains peers such as BTC or BCH. The culprit behind the problem seems to be an app that went rogue.
Ethereum Backlog Leads to Network Slowdown
If you wanted to deposit or withdraw ERC20 tokens from a cryptocurrency exchange yesterday, you most likely would have experienced a long delay. Gas prices have reached unusual heights in recent days, a transaction coming to require on average 50 gwai for its execution.
The Fcoin GPM Listing appears to be the culprit behind this problem. The app requires all applicant projects to use substantial gas fees to airdrop to FCoin accounts to make a ‘deposit vote number’. On a daily basis, the top five projects are listed on that exchange according to their collective deposit number, after which the cycle is repeated.
This apparently China-based site is a new player in the cryptocurrency world, which generated a lot of inconveniences for those that have been trying to use the Ethereum network. This isn’t the first time when Ethereum was significantly slowed down due to a single application; former perpetrators include Crypto Kitties and a number of shrimp farming games (Ether Shrimp Farm, Ether Cartel, and Pepe Farm). At one point on Monday, the ETH Gas Station experienced prices estimated to 500 gwai, and yesterday it hit a record of gas used on the network- 44.4 billion.
Mycrypto, a popular Ethereum interface started a Twitter rant on Tuesday regarding Fcoin GPM Listing’s selfishness, condemning it of making use of a “mind-numbingly despicable voting mechanism that, quite literally, incentivizes Sybil attacks”.
One of the worst, but less recognized, side-effects of apps interfering with a blockchain’s functions is that they discourage people from making on-chain transactions. When a trader worries that they will be unable to transfer their coins from their hardware wallet in time to take advantage of a market movement, they will be more disposed to store their coins on a centralized exchange and losing their financial independence as a result.
In addition to wild schemes such as that of the questionable Fcoin GPM Listing, certain Ethereum smart contracts are have been created to require more gas than usually needed. To encourage gas to be used more efficiently, a Solidity Gas Golfing Competition was recently organized “to produce the most gas-efficient code…for a series of straightforward challenges”. All developers can help optimize gas usage on the Ethereum network. But they are unable to stop the stream of scam apps that exploit the blockchain, and hindering the service for all the users.