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.”

eos.png

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.

Total Value Locked in Decentralized Finance Apps Hits $1 Billion All-Time High

The total value of the cryptocurrency locked in decentralized finance (DeFi) applications has surpassed the $1 billion mark thanks to the cryptocurrency market’s positive performance so far this year.

According to data from DeFi Pulse, the value hit $1 billion today, February 7, after rising exponentially over the last 12 months, as in February 2019 about $279 million worth of cryptocurrency were locked into DeFi apps.

The Ethereum-based lending protocol Maker Is the leader in the decentralized finance space. Maker allows users to issue the Dai stablecoin, traded on the Oasis app, and earn interest on stablecoin holdings using the Dai Savings Rate (DSR). It has about $599 million worth of crypto locked in it.

Total value locked on DeFi appsSource: Defi Pulse

Other popular applications in the decentralized finance space are Synthetix, a platform that allows for the creation of “on-chain synthetic assets that track the value of real-world assets,” and Compound, an application that lets users earn interest on holdings or borrow funds against collateral.

While the total value of assets locked in the decentralized finance space hit the $1 billion mark, the total amount of ETH locked has been hovering around the 3.15 million ether for a few weeks. The DeFi space also includes Bitcoin’s layer-two scaling solution, the Lightning Network, which has around $8.5 million worth of BTC locked in it.

The total value of assets hit $1 billion thanks to the price rise of both ether and bitcoin, as both cryptocurrencies are up so far this year. CryptoCompare data shows that over the past 30 days BTC went up nearly 17%, while ETH went up around 55.8%.

BTC vs ETH performanceSource: CryptoCompare

On social media some users criticized the flagship cryptocurrency’s layer-two scaling solution for contributing so little to the DeFi space when compared to Ethereum-based decentralized applications.

Featured image via Pixabay.