The cryptocurrency exchange Binance inadvertently set off a massive spike in Ethereum gas fees, resulting in a staggering 1,900% increase.
Unexpected Surge in Gas Fees
This unexpected surge in gas fees came as a consequence of a flurry of transactions involving a dormant wallet associated with Binance, referred to as Binance 14.
According to reports from FXStreet, this particular wallet experienced a sudden surge in transaction activity, leading to a significant rise in Ethereum gas fees.
The fees shot up from a mere 15 Gwei to nearly 300 Gwei, while person-to-person transactions, on average, increased from a mere 40 cents to approximately $10. This startling development was based on data obtained from Dune Analytics.
Dormant Wallets Awakened
Further investigation revealed that Binance 14 received Ethereum from wallets that had remained inactive for nearly three years.
The transfers, which occurred within a brief 20-minute window, acted as the catalyst for the sharp increase in Ethereum gas fees. In a single day, the recipient wallet spent over $840,000 in Ether gas fees.
Binance swiftly responded, explaining that these transfers were part of a routine consolidation of Ether to one of its wallets.
The unintentional consequences of this move led to a surge in gas fees. Binance resolved the issue quickly.
Nevertheless, the incident drew criticism from traders who questioned the decision to bundle these transactions together. This bundling caused network congestion and resulted in the imposition of higher fees.