Crypto exchange Bitfinex completed a highly consequential transaction on Sept. 27 when sending $100,000 of the stablecoin Tether (USDT) to the layer-2 subsidiary platform DeversiFi. For reasons unknown, the exchange paid 7,626 ETH, equivalent to $23.7 million, marking quite possibly the largest gas fee ever recorded on the Ethereum blockchain.
According to blockchain data from EtherScan, the deposit transaction was initiated at 11:10 UTC this morning from Bitfinex’s second-largest wallet, via a second address, to the wallet of DeversiFi. The transaction carried an “erroneously high gas fee”, even though DeversiFi promotes a service to “avoid gas costs and frustration, saving you time and money with every trade or swap.”
To put the enormity of this fee into context, consider the fact that the average transaction fee on the Ethereum blockchain currently stands at 0.013 ETH, or $39.96. In addition to this, two weeks ago, $2 billion of BTC was transferred between unknown wallets for an infinitesimal fee of $0.78.
DeversiFi revealed that they have launched investigative procedures to determine the most probable cause of the matter, while also adding that: “No customer funds on DeversiFi are at risk and this is an internal issue for DeversiFi to resolve”, as well as that "operations are unaffected.”
In response, Bitfinex tweeted that: “In transactions such as these, the fees are shouldered by third party integrations with Bitfinex," suggesting that the exchange will not directly bear the burden of the fee.
In June 2020, another gas fee mystery occurred with numerical similarities to the Bitfinex case when three small to medium transactions registered seismic costs, with one 0.55 ETH transfer carrying $2.6 million in fees.
At the time, Ethereum co-founder Vitalik Buterin expressed his agreement with the human-error narrative, adding that: “I’m expecting EIP-1559 to greatly reduce the rate of things like this happening by reducing the need for users to try to set fees manually.”
However, experts in the field circulated theories of blackmail, fraudulent activity and even money laundering after the last of the three transactions was confirmed as a “malicious attack” when the wallet owner reached out to the mining pool that facilitated the transaction. The owner in this case subsequently received 90% of the lost funds.
In a good-willed act of crypto kindness, the block miner who mistakenly fortuned from the transaction event has returned the 7626 ETH to Bitfinex. DeversiFi also promised a post mortem analysis to be published soon.