Someone has just Paid $22M in Ethereum Fees
- Bitfinex paid $22.7 million in transaction fees after sending $100,000 worth of USDT
- DeversiFi announced the miner returned the 7,626 ETH that was paid out by mistake
- Fees on Ethereum have not been resolved despite the EIP-1559.
Innovation is not always as predictable as some may think. Using blockchain comes at a price, and entities transacting large amounts of cryptocurrencies are susceptible to network malfunctions or fee incongruencies. For example, on September 27th, an Ethereum wallet reportedly paid $23 million in transaction fees.
Bitfinex Pays Excessive Fees
Data from Ethscan.com shows a wallet associated with Bitfinex paid a total of 7,676 ETH or $22.7 million after initiating a transaction worth $100,000 USDT. The USDT amount was sent to DeversiFi, as the company announced the successful implementation of the L2 bridge to enable low-cost transfers to presumably “avoid gas costs and frustration.”
Following the network error, Bitfinex announced the exchange would not carry the fees as they are “shouldered by third-party integrations,” after DeversiFi announced it would investigate the issue.
Although transactions on the blockchain are irreversible, DeversiFi tweeted that block 13307440 miner announced it will be returning all transaction fees that were paid out “incorrectly.” DeversiFi also confirmed it would issue a post mortem on September 28th.
Although the issue might seem like a network failure, Bitfinex has been accused in the past of market manipulation, which has put the exchange in the spotlight. Nonetheless, Etheruem’s gas fee structure has been criticized, with users reporting fees of over $1,000 as users compete for faster minting, provoking a Gas War.
On The Flipside
- The event will trigger new discussions about better network alternatives than Ethereum.
- It is not yet clear how and why Bitfinex paid an absurd transaction fee.
It Will Happen Again
The much anticipated and criticized EIP-1559 was never meant to resolve the high gas fees. Vitalik Buterin noted the new update will “reduce the rate” of high network fees by creating an automated fee decider called a “priority fee.”
However, network cutbacks will continue to occur as blockchain continues to innovate. For example, in 2020, a user paid $2.6 million on the Ethereum network after sending $130. In contrast, a user moved the equivalent of $2 billion in Bitcoin while only paying $0.78.
Why You Should Care?
Gas fees on the Ethereum network are still unstable despite the implementation of the “base fee.”
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