A small, lesser known Chinese cryptocurrency exchange has allegedly been held responsible for the unusually high number of congestion occurring on Ethereum Network, sending gas fees to record numbers over the last few days.
FCoin, created by Zhang Jian, a former member of Huobi, has been officially accused of intentionally encouraging a series of harsh attacks to temporarily shake up the Ethereum blockchain, thereby receiving cheap attention as a result.
Over the last few days, Ethereum’s network has been congested to say the least. With transaction prices soaring to all time highs, problems have been surfacing for DApps with users who can’t pay the high rising transaction fees. The spikes in the network, have created issues while at the same time have been linked directly to FCoin, which supposedly started a “cumulative deposit number ranking” voting protocol for listing new tokens on their exchange.
Basically, this means is that for a new token to be added to the exchange, the one vote per user infrastructure used in the past will not work, votes are now cast by sending tokens directly to the exchange. Once the voting period has come to an end, the token that that been deposited most will be placed on the exchange. There has now been an obvious incentive created to carry out multiple votes from each person, using different accounts to send multiple tokens to the exchange – known as a Sybil attack.
A wealth of sub-par Ethereum oriented tokens have now been placed into the race to get put on FCoin, continuing the Sybil attacks with an alarmingly large amount of congestion occurring on the network. The congestion has increased the time it takes to complete transactions, not to mention the fees in the process. The bad news for the regular users of Ethereum’s blockchain is that not only do they have to deal with the lag and high prices, but they also have to deal with the other types of disruption now appearing on the network.
What Did FCoin Gain?
Numerous crypto analysts state the obvious first, the flawed voting style is likely deliberate, done to create a problem at the network in an attempt to get an influx of publicity on the old adage that there’s no such thing as bad publicity. The exchange also hopes to ride the anger wave coming to them from disputing users who rely on Ethereum for their primary use blockchain technology platform.
A single Tweet threat from MyCrypto on July 2nd read in part:
“As we’ve been looking into the recent network congestion / high gas prices, one of the more interesting things to come to light involves a random exchange (whom we will not name as this is likely part of their “PR strategy”)…In summation: F**k exchanges, projects, or tokens that incentivize bad behavior, like Sybil attacks. Do not fall for their s**t. Instead, reward those who are building remarkable tools & communities responsibly.”
FCoin made no immediate responses to the CCN’s request for comments.