One of the most popular Ethereum and ERC20 token wallets ever created, MyCrypto, has heavily criticized FCoin, a Chinese Cryptocurrency Exchange, for congesting the Ethereum network with meaningless transactions recently.
FCoin, which has created by a former Huobi CEO, has started its services in 2018, has decided that instead of making its own process to verify tokens before listing them it would let the community decide the tokens that could be listed on the platform. Unlike decentralized exchanges, FCoin is also centralized and it manages both the private keys and the funds of its users.
This is a key feature of why the company is able to conduct pools among its investors to decide tokens that could be listed because it has some control over their tokens. However, FCoin has decided on a less practical way of achieving consensus and this is the main problem that MyCrypto Wallet has with the company.
For a token to be listed on the platform, the developers need to first give mass airdrops to the users before they decide whether the token should be listed or not. This creates a huge flow of unnecessary transactions in the Ethereum network.
The Main Problem Of FCoin’s Model
MyCrypto, via its Twitter profile, has heavily criticized the model that is being used by the company and called it irresponsible and stupid. According to the company’s tweets, FCoin could simply use a pool or a voting mechanism but it uses an ineffective system that congestions the network and make the transaction fees considerably higher.
According to MyCrypto, even scam tokens are being used on the platform and capitalizing on the business model that the company has decided to use. While Ethereum developers are making a real effort to improve the scalability and the ecosystem of Ethereum, scam and bad tokens are using FCoin model to profit while the company congestions the network and makes it worse for everybody.
While some decentralized protocols like 0x are starting to use off-chain systems to batch transactions and reduce congestion on the network, this follows the opposite path. Despite the efforts of these projects, FCoin and similar projects impact negatively on the ecosystem. Until proper scaling solutions are found, it is expected that many controversies like this one will happen.