A Binance wallet spent nearly $1 million in Ethereum transaction fees, noticeably raising fee costs for a moment.
- Binance Wallet Spent Over $800,000 in Ethereum Gas Fees
- Unusual activity spiked ETH transaction fee costs momentarily
- The reason for unusually high rates is unknown
Ethereum transaction fees momentarily skyrocketed more than 2,000% this Thursday and everything indicates that a wallet on the Binance cryptocurrency exchange is responsible.
A wallet identified as belonging to Binance has been involved in unusual activity that has resulted in more than 140,000 transactions with abnormally high transaction fees (gas) on the Ethereum network. According to data from Dune, the “ Binance 14 ” wallet has spent 530 ETH, or the equivalent of USD $840,000 in transaction fees in the last 24 hours.
Transactions received by this wallet consistently paid fees in excess of 300 Gwei, even though the network average remained close to 10 Gwei, as noted by journalist Colin Wu. This high spending, almost 3,000% higher than the average level, caused a significant, but temporary, increase in transaction fees on the Ethereum network.
It is worth noting that gas fees represent the computational cost that users incur to execute and validate their operations on Ethereum. As of press time, the average transaction fee cost is 14 Gwei or about 50 cents, according to data from block explorer Etherscan.
While Binance has not provided any official information on the issue to its customers, Wu assured that the exchange had allegedly responded that they were carrying out their wallet aggregation process when gas fees were low to ensure the safety of users’ funds…
Experts speculate on the subject
Meanwhile, some observers have weighed in to offer their opinion. Among them, on-chain analysts at Scopescan noted that the increase in gas fees was related to the consolidation activity of inactive deposit addresses on Binance.
“ Because Binance consolidates funds from long-inactive deposit addresses, the Ethereum network is experiencing congestion, causing gas fees to increase to 300 Gwei,” Scopescan wrote on social media.
Gnosis co-founder Martin Köppelmann, for his part, suggested that Binance could be using a highly inefficient script to consolidate funds, which would lead to it significantly overpaying transaction costs. Web3 investor Belinda Zhou shared this idea and described Binance engineers as “ incapable .”
Another who shared his opinion was Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, who also criticized the exchange and suggested that the unusual fees were the result of poor APIs. He also cast doubt on Binance ‘s ability to keep “ hundreds of billions in coins safe across multiple protocols .”
