Ethereum Bulls Confront Misleading On-Chain Surge Amid Rising Address Poisoning

Ethereum recently set a record by processing nearly 2.9 million transactions in just one day. However, on-chain data reveals that much of this activity stems from inexpensive address poisoning spam rather than genuine demand for transactions, especially following the Fusaka upgrade.

Key Takeaways

Ethereum recorded nearly 2.9 million transactions in one day, setting a new record.
On-chain data indicates that much of this surge is driven by address poisoning attacks, rather than genuine user demand.
Address poisoning involves sending small stablecoin transfers to create false positive transaction counts.
Approximately 80% of the increase in new addresses correlates with stablecoin activity.
Recent low transaction fees have made it easier for scammers to deploy these tactics more frequently.

Ethereum transaction record driven by address poisoning spam

Overview of Ethereum's Recent Transaction Surge

In the last week, Ethereum achieved an all-time high of almost 2.9 million transactions, according to on-chain analytics. Despite this remarkable activity, Ether's price did not increase correspondingly, prompting concerns about the authenticity of this transaction growth.

Key Metrics and Findings

During the spike, average transaction fees remained low while validator exit queues decreased to zero. Yet, Ether's price exhibited minimal fluctuations compared to the wider market.

On-chain researcher Andrey Sergeenkov linked the surge in transactions to extensive address poisoning campaigns. These attacks involve malicious actors inundating wallet addresses with minor stablecoin transfers, resulting in inflated transaction counts and misleading data on user activity.

Understanding Address Poisoning Attacks

Address poisoning entails scammers creating fraudulent wallet addresses that closely mimic legitimate ones. They then send tiny or negligible stablecoin amounts to potential victims, ultimately inserting fake addresses into a user’s transaction history. Since wallets typically show only the shortened versions of addresses, this tactic can lead users to accidentally copy and send funds to these malicious addresses.

Sergeenkov's analysis revealed that around 80% of the unusual rise in new addresses is attributed to stablecoin transactions. His research showed that approximately 67% of newly active wallets received minimal amounts as their first transfer, indicating automated distribution rather than true user engagement.

In his findings, out of 5.78 million addresses analyzed, about 3.86 million had received what Sergeenkov termed "poisoning dust" as their initial stablecoin transfer. He tracked these small transfers and noted that the senders had dispersed dust to at least 10,000 unique wallet addresses, primarily through smart contracts that executed minimal stablecoin transactions across hundreds of thousands of wallets.

The Role of Low Transaction Fees

Since early December, following the Fusaka upgrade, reduced transaction fees have made it more feasible for attackers to carry out millions of low-value transfers. This decline in costs has turned what was once an infrequent scam into a more practical method for orchestrating attacks.

Overall, these findings suggest that while the low fees and efficient throughput on the Ethereum network may indicate advancements in technology, they also lower the cost barrier for spam activities. Consequently, if a significant part of recent on-chain activity consists of low-value transactions, the increasing transaction counts may not accurately reflect true demand for blockspace, decentralized applications, or the broader Ethereum blockchain.