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Recently Ethereum network got congested resulting in the shooting up of gas price to 100 Gwei. Apparently, the Chinese crypto exchange Fcoin that has been conducting a voting for coin listing has been the reason for this debacle.
Who is the Culprit?
Last few days have been tough for the Ethereum Network. All major exchanges had a notice put up about the congestion on Ethereum Network. Initially what was considered as Sybil attack (attack wherein a reputation system is subverted by forging identities in peer-to-peer networks.),
now, according to the Reddit post put up on r/ethereum, turns out to the voting system that FCoin follows to list new coins on the exchange. This has also lead to Gas price (transaction fee) to shoot up, on some occasions skyrocketing more than five times.
FCoin is a new China-based crypto exchange that was launched in May this year. According to its whitepaper, FCoin (FT) is “an autonomous, efficient and transparent digital asset trading platform”. It’s a community of FT holders where every holder/member has certain rights like participating in revenue allocation, governance, and voting similar to a decentralized exchange. The developers of the exchange hope to provide traders and investors a platform that they can trade securely for any given crypto asset. To do so, they aim at providing an impartial and transparent ecosystem.
FCoin published a post on its maiden June 28th regarding its listing rules for projects calling it FCoin GPM(Growth Project Market). According to the rules set by exchange the post stated:
“The listing rule of FCoin GPM adopts the mechanism of “The cumulative deposit number ranking”. From now on till 0:00 on July 1st, 2018, the tokens with top 20 total number of deposit accounts will be eligible for the first listing on the FCoin GPM on July 2, 2018. We will open the ranking page on June 28, 2018 (Note: Before the page goes online, the number of deposit accounts will normally accumulate)”.
After July 1st, 2018, we will count the top 5 of the “The cumulative deposit number ranking” at 0 points each day and will list these tokens on the second day. The duration of this listing rule is subject to future announcements.” This is considered to be the reason for congestion.
Related article: Binance Raises Gas Price on Withdrawals as Eth Fees Reach its Peak While Transactions Fall
Why this led to congestion?
According to the rules for listing, users were to transmit a minimum amount of the Fin token to the exchange wallets. The problem is that the vote wasn’t weighed in terms of the total amount or specific value of the tokens. It was based on the volume of unique addresses that manage to send the tokens.
According to the Redditor who posted was quoted saying
“An exchange called Fcoin is holding a vote for new token listings, and voting is done by transferring a minimum amount of the token to the exchange. The vote is weighed not by total amount/value of tokens, but by how many unique addresses the tokens have been sent from. Unsurprisingly, this has resulted in the heavy congestion we’re experiencing now.”
The Ethereum network saw gas price rise to its maximum since January. The network overload has resulted in huge delays. Transactions on the Ethereum network have taken longer to confirm due to the congestion resulting in unexpected delays.
However, the current network issues will serve to heighten the anticipation surrounding the release of Casper and Sharding. It is hoped when the two upgrades are implemented, such congestions will be a thing of the past.
Let us know your views on Fcoin voting system leading to Ethereum network congestion below!
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