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The Most Expensive Ethereum Transaction Gone Wrong: Know How?

On 27 September 2021, the crypto exchange Bitfinex made the most expensive Ethereum transaction where it paid $23.5 million as transaction fees for transferring $100,000 in USDT (Tether) through the network of Ether cryptocurrency as per the public transaction data on Etherscan.

The transfer took place at 11:10 UTC on 27.09.2021 and looks to have been sent from a wallet that is being controlled by Bitfinex to a wallet that belonged to DeversiFi. DiversiFi is a non-custodial exchange that has been spun off from Bitfinex in 2019. According to a spokesperson of Bitfinex,

“In transactions such as these, the fees are shouldered by third-party integrations with Bitfinex. This has also been confirmed by DeversiFi in their recent statement. We look forward to DeversiFi’s investigation and to their having this matter sorted on their side.”

DiversiFi in context to this confirmed that,

“A deposit transaction was made using a hardware wallet from the main DeversiFi user interface with an erroneously high gas fee. We are investigating the cause to determine how this occurred.”

Explanation Of Diversify On The Most Expensive Ethereum Transaction

Here is an explanation of DiversiFi whose wallet is associated with the most expensive Ethereum transaction worth $23.5 million. As per the reports,

 “underlying issues in the EthereumJS (JavaScript) library coinciding with gas fee changes associated with the EIP-1559 upgrade in some circumstances can lead to transactions with extremely high fees.”

Above that, the Ledger hardware wallets may show the fees in a manner that cannot be read by non-humans. They further add that only the wallet that has a very large amount of funds would face the impact while the rest would witness a failed transaction.

The Ethereum Transaction Fee now measures the average fee in dollars when an Ether transaction is carried forward by a miner and confirmed. Presently in Ethereum vs Bitcoin, the transaction fee of BTC is more than ETH.

While DiversiFy was investigating this matter, the team made some mock deposits using Ledger wallet to create a replication of the issue. They found that when they saw the priority fees and the Eth gas fee were measured and then converted into a huge bag object. Since to predict the priority fees the last few blocks are used, it was possible that the calculation resulted in a decimal figure. But the EthereumJs library does not support any kind of decimal figures thus resulting in error. But since the conversion of the value first happened in the buffer no error handling was initiated. As per the report,

“DeversiFi is actively engaging with both the Ethereum community and Ledger to patch issues that may have contributed to this occurrence. EIP-1559 does not protect against accidental overspending.”

Conclusion

On 27 September, the crypto exchange Bitfinex made the most expensive Ethereum transaction that was worth $23.5 million as there was a mistake in the calculation. The amount was sent to a non-custodial exchange DiversiFi. But after a research, DiversiFi found out the issue and assured that the miners will return the Ethers.

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