Gas Prices Surge on Ethereum Mainnet Due to Inefficient Binance Transactions
Gas prices on Ethereum’s mainnet experienced a temporary surge on September 21 due to a series of “inefficient transactions” conducted by an address known as Binance 14. Within a 24-hour period, this wallet made over 146,000 transactions and overpaid for Ethereum transactions, spending up to 300 gwei on regular transactions. This resulted in Binance spending $840,000 on gas fees in less than a day, while the average gas fee at the time was around 10 gwei.
A Dune dashboard revealed that Binance ended up paying 530 Ether (ETH) during this process. Martin Köppelmann, co-founder of decentralized protocol Gnosis, confirmed that the transactions were related to consolidation from “long-inactive deposit addresses.” He also mentioned that Binance’s inefficient script and overpayment of transaction costs contributed to the spike in gas prices.
A Recurring Issue
This incident is not the first time Binance has caused such a surge in gas fees. In December 2022, Coinbase director Conor Grogan pointed out a similar occurrence when gas fees spiked above 100 gwei after Binance consolidated $32 million in Tether’s stablecoin USDT from 135,000 addresses.
Binance Faces Legal Disputes
Aside from these technical issues, Binance is currently facing legal disputes with U.S. regulators over alleged law violations. The Securities and Exchange Commission is investigating the exchange, leading to several employees, including Brian Shroder, CEO of Binance.US, resigning. Furthermore, Binance CEO Changpeng ‘CZ’ Zhao has denied receiving a $250 million loan from BAM Management.
Hot Take: Binance’s Inefficient Transactions Cause Gas Price Surge on Ethereum
The surge in gas prices on Ethereum’s mainnet was a result of inefficient transactions carried out by Binance. The crypto exchange’s overpayment for Ethereum transactions and the use of an inefficient script led to exorbitant gas fees. This incident is not the first time Binance has caused such a spike in gas fees, as a similar occurrence happened in December 2022. Additionally, Binance is currently facing legal disputes with U.S. regulators over alleged law violations, causing several employees to resign. Despite these challenges, Binance CEO Changpeng ‘CZ’ Zhao has denied receiving a large loan from BAM Management. It is crucial for crypto exchanges to optimize their transaction processes to avoid unnecessary costs and disruptions in the future.
By
By
By
By
By