Chinese Exchange FCoin Manipulate Ethereum Network Causes the Extreme High Gas Fee
Of late, Ethereum’s average transaction fees have surpassed Bitcoin for the first time in the history. Huobi Research has also mentioned this issue in its weekly report.
According to the report, the transaction fees surges since late June. Based on the data from Huobi research, the gas fee increased more than 1994% within two weeks. It suggested that the China-based exchange FCoin should be solely responsible for the unusually high Ethereum network congestion and gas fees recorded over the past few days.
FCoin is founde by Zhang Jian, the former chief technology officer of Huobi. On July 2, FCoin launched its subsidiary platform FCoin GEM (growth enterprise market). The platform has implemented a “cumulative deposit number ranking” voting protocol to list new coins on the exchange.
Which means, in order to add a new coin to the platform, votes are counted by sending the desired coins to the exchange. The coin with the most deposits will be able to listed on the exchange by the end of the voting period.
For those who wants to list their tokens on the exchange, they may use different accounts to send tokens to FCoin exchange. what FCoin doing has been criticized as ‘Sybil attack’ which is defined as “the act of creating large numbers of pseudonymous identities to gain a disproportionately massive influence on a network .”
This voting mechanism has substantially increased the amount of congestion on the Ethereum network due to massive Ethereum-based coins entered the FCoin listing race which end up increased the transaction fees and gas fees.
The regular Ethereum blockchain users express their anger towards the firm due to the high transaction fees and disruption and time needed for transaction confirmation. Some users complained that it is disappointed that the $400 billion market cap cannot even provide a single stable blockchain.