EOS Whales Behind Spam Attack on Ethereum Network, Claims DApp Developer

Francisco Memoria
  • A DApp developer and several ETH users claim EOS is attacking the cryptocurrency's network.
  • This as hundreds of accounts allegedly funded by an address with crowdfunded EOS are creating useless tokens and "wash trading" them.
  • Per Block.one CTO Dan Larimer, the company behind EOS has better things to do than attack the second-biggest cryptocurrency.

The Ethereum network has allegedly been under a spam attack that’s meant to harm its reputation, according to various Reddit users and analysts. Recently, transaction fees surged over 100% as the cryptocurrency’s network was being clogged with transactions.

DApp creator Justo, from the team that launched two gambling games called PoWH3D and Fomo3D, claims 40% of the Ethereum network was being used by a contract that issued an ERC-20 standard token called “IFishYunYu.” The token, per Justo, has no features, and does nothing.

Despite its uselessness, thousands of alleged spam accounts are transferring massive amounts of these tokens for no apparent reason, with some flowing through the controversial FCoin exchange. Per Justo, the exchange is just a ruse, as the real attacker is EOS.

Speaking to TrustNodes, the dApp developer claims thousands of these tokens have been appearing, presumably in an attempt to launch the attack:

Thousands of random tokens, with no website, or bootstrapped template websites made in hours. Wasting hundreds of ethereum daily, hundreds of thousands of dollars to drop tokens. This happened up until the launch of EOS, on the 6th, then immediately stopped.

Justo

What makes the large amount of transactions look like an attack is its unusual effect on transaction fees. When CryptoKitties was clogging the Ethereum network in December, about 1.4 million transactions were being processed a day, and fees were under $1. Now, with over 500,000 being processed, fees are above $2.

Further connecting the attack to EOS is the path some IFishYunYu tokens have taken. It reveals the token’s creator, after issuing 5 billion tokens, split them across 500-600 different accounts and started spamming the network. Blockchain data shows the transactions are being funded by an address that has “a lot of crowdfunded EOS.”

On Reddit, a thread exposing the attack reads:

Gee, that sure is a lot of crowdfunded EOS, hundreds of thousands to be exact. From an account that seems to receive large sums of eos and immediately market sell them for thousands of ETH, which is then distributed out to contracts like this. Contracts that have been pulling this kind of transaction attack consistently across the ETH network.

Reddit

EOS could have a reason to attack the ETH network, as some of its supporters claim it is an “Ethereum killer.” The cryptoasset doesn’t use a Proof-of-Work system, but goes with Delegated-Proof-of-Stake, which allows it to process thousands of transactions per second, but sacrifices decentralization.

Responding to the controversy, EOS architect and Block.one CTO Dan Larimer claimed the company has better things to do than attack the second-biggest cryptocurrency’s network “when all it takes is crypto kitties.”

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EOS is notably no stranger to controversy, as last month its 21 block producers (BPs) were ordered by the EOS Core Arbitration Forum (ECAF) to freeze 27 accounts. In response to the controversy that ensued, Larimer proposed a new constitution that seemingly stripped the ECAF off its powers.

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Privacy Features Are Going To Change Ethereum For Good

Michael LaVere
  • Ethereum developers are working towards completely private transactions
  • Rise of Facebook coin and regulatory pressure makes privacy more necessary than ever

Privacy has become a buzzword in the industry of cryptocurrency and ethereum developers are beginning to recognize its importance.

Vitalik Buterin on Ethereum Privacy Features

Ethereum has been frequently headlines in 2019 over its slow transition to ETH 2.0. The Constantinople upgrade represents a first of its kind: a non-hard fork, massive overhaul that will shift ethereum’s algorithm from proof-of-work (PoW) to proof-of-stake (PoS).

Security features have likewise become a focal point in the transition.

In May, Ethereum co-founder Vitalik Buterin published a piece on HackMD claiming the network was in need of a step towards “more privacy.” Buterin proposed a feature for allowing ether users to obscure their activity on the blockchain in one-off transactions, calling his design a “minimal mixer” that relied upon “anonymity sets.”

Buterin further explained his idea in an email with CoinDesk,

“Anonymity set is cryptography speak for ‘set of users that this thing could have come from.’ For example if I sent you 1 ETH and you can’t tell who exactly it was from but you can tell that it came from (myself, Alice, Bob or Charlie), then the anonymity set has size 4. The bigger the anonymity set the more privacy you have.”

Development Focus For Ethereum

Blockchains provide public ledgers that allow for transparency--a concept that has been antithetical to anonymous transactions in the past.

However, the evolution of mixers and zero-knowledge proofs has created the opportunity for privacy on a platform like ethereum, while still maintaining the integrity of the blockchain.

Itamar Lesuisse, CEO of Argent, gave his support for increased privacy on ethereum, even in the ‘simplest’ of use cases,

“If you just look at the most simplest use case, if I say, ‘Hey Christine, can you send me ten dollars [worth of ether]? Here’s my wallet address.’ Now, you know how much money I have.”

Lesuisse continued,

“It’s so transparent, which is a great picture of blockchain, but for some users, it might scare them away to use it at scale.”

The Argent CEO and other developers are working towards the creation of tools that allow for private transactions, which they believe will lead to increased adoption. The blockchain team at Big Four auditor EY has also been active. Last month, the group released code on GitHub under the name ‘Nightfall,’ which provides a solution for enabling anonymous ether transactions.

According to the GitHub post, Nightfall integrates a set of smart contracts, microservices  and zk-snarks to enable ERC-20 tokens to be transacted on ethereum’s blockchain in “complete privacy.” While the code is still an experimental solution, it could provide ether users with privacy transactions to rival top anonymity cryptos like monero and zcash.

Privacy Needed More Than Ever

Two recent developments will enhance the need for privacy features moving forward. Social media giant Facebook is wading into digital currencies with the launch of libra, despite having been proven inept at securing user data in the past. In addition, the intergovernmental Financial Action Task Force (FATF) passed a controversial mandate on Friday requiring crypto exchanges to share user data.

Both could have the effect of pushing users towards privacy coins, in an effort to escape the increased centralization and regulation imposed on cryptocurrency.