Cryptocurrency Exchange Accidentally Spends $23.7 Million in One Ethereum Transaction

Decentralized cryptocurrency exchange DeversiFi has accidentally attached a transaction fee of nearly $24 million to a cryptocurrency transaction moving $100,000 worth of Tether’s USDT stablecoin.

According to data from Ethereum blockchain explorer Etherscan, DeversiFi paid 7,676.61 ETH then worth nearly $24 million in transaction fees, while the current estimate for an average transaction fee on the Ethereum network if of around 0.0089 ETH, or $26.

The exchange revealed on social media that a “deposit transaction was made using a hardware wallet using the main DeversiFi user interface with an erroneously high gas fee” attached to it. The transaction with the hefty fee was included in a block mined by one of the top 10 Ethereum miners by blocks mined over the last seven days. It may have been the largest transaction fee ever paid in U.S. dollar terms.

DeversiFi has since revealed that the miner of the block that included the transaction returned 7,626 ETH to the cryptocurrency exchange, and is set to publish a post mortem soon.

The transaction was made using the newly implemented EIP-1559 protocol, which was created to make transaction fees on the Ethereum network easier to predict, by creating a basefee that rises with demand and is then burned. The introduction of a burning mechanism in August, at the time of the London hard fork, has seen the network burn over 383,721 ETH.

The accidental transaction fee was included in a transaction from Bitfinex to DeversiFi. Bitfinex and DeversiFi are closely linked, with the latter’s three co-founders having worked at Bitfinex before moving to the decentralized exchange. A link between both exchanges allows users to move USDT at a low cost.

According to Bloomberg, a Bitfinex spokesperson said they are looking “forward to DeversiFi’s investigation.”

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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