Ethereum users noticed a smart contract moving tokens, which had no clear purpose, but led to extremely high gas prices.
The Ethereum (ETH) network faced heavy congestion over the weekend, leading some to suspect a concerted effort at launching spam transactions. Over the weekend, gas prices reached above 200 GWei for higher speeds:
Later, the Ethereum gas station showed the gas price had normalized, with 9 GWei the highest price for fast transactions, and an average dollar price of $0.047 per transaction.
However, the contract, known as iFish, keeps sending token transactions, for now without affecting the gas price. At one point, the smart contract used as much as 40% of gas prices. The serial transfer of tokens, according to Reddit user probablynotarussian, indicates the gas cost was up to 50 Ethereum an hour, running for about a day.
The iFish smart contract also communicated with one curious address, which for months held vast amounts of EOS, which were subsequently most probably moved out and swapped for the new token. However, the presence of so much EOS makes some believe there was a concerted effort to spam the Ethereum network, and create a narrative of a constant congestion.
The explanation proposed is that the donated EOS was sold for Ethereum, which was then used to sustain circular transactions moving tokens, creating fake volume, and making transactions more expensive and slower for all other Ethereum users.
The congestion comes just weeks after one big gas price spike on July 2, when transaction fees at one point required 5 ETH. The reason for the congestions are usually ICO smart contracts, more rarely distributed applications.
Ethereum transactions hover around 550,000 in 24 hours, the usual level that is about 10 times the transactions on the Bitcoin network. The constant movement of tokens, and the increased fees are not breaking the network rules – but merely displacing transactions from other users. There are no limitations to the market principle of gas prices, hence the possibility that someone could pay their gas fees and keep the network busy for days.
The other potential reason could be a form of “growth hacking”, which is used to make tokens, smart contracts, or distributed exchanges more prominent, and give them legitimacy with a high number of transactions.
The Ethereum congestion happens just days after the EOS network distributed the IQ tokens of the Evripedia project, thus becoming one of the leading networks in terms of transactions in a day. However, the Ethereum network works on an entirely different principle, with thousands of miners, instead of just 21 block producers, and has different speed limitations.
ETH changed hands at around $450, down 7% net in the past seven days, but remained largely not affected directly by the network congestion, since exchange trading is not dependent on blockchain transactions.