Why Bitfinex Paid $27 Million For An Ethereum Transaction

Why Bitfinex Paid $27 Million For An Ethereum Transaction

In just another Monday on Crypto, users reported that Bitfinex paid a single miner the astonishing sum of $23 million to validate an Ethereum transaction. In what could potentially be the largest fee an ETH miner has ever received to validate a block, the reasons behind it remain as pure speculation.

The crypto exchange sent $100,000 in its stablecoin Tether (USDT). Therefore, the community believes someone at Bitfinex made a very costly mistake. As seen below, the transaction was included at the height of block 13307440.

New record cost of transaction on @ethereum: $23.6M (7,676 ETH). $100k USDT has been moved from @bitfinex to @deversifi with a record breaking cost of tx.https://t.co/o58H9jV6yP pic.twitter.com/D9iuCldR4Q— ICO Analytics (@ICO_Analytics) September 27, 2021

With 898 confirmations at the time of writing, the fee amounts to 7,676.61 in Ethereum (ETH). Pseudonym trader Hsaka tracked down the transactions associated with the miner and believes the person must be unaware of the potential mistake that worked in his favor. The trader said:

The miner that mined the $23m fee block seems to be continuing with his periodic (most likely automated) transferring to Binance. Doubt he’s even aware of this yet. Would not discount him returning a portion of the fees (assuming he’s alerted to the events that have transpired)

At the time of writing, Bitfinex has not issued a statement or comment regarding the transaction fee. However, via their Twitter handle the exchange retweeted a statement made by decentralized exchange DeversiFi.

The DEX was one of the entities that were involved in the Ethereum transaction. They claimed that a hardware wallet from their main user interface recorded an “erroneously high gas fee”. DeversiFi added:

DeversiFi is currently investigating the cause to determine how this occurred and will keep you updated. No customer funds on DeversiFi are at risk and this is an internal issue for DeversiFi to resolve. Operations are unaffected.

The Largest Transaction Fee Paid On Ethereum

According to their website, DeversiFi is a platform that facilitates DeFi access for its users. Via their interface, users can invest, trade, and send transactions without “paying gas fees”.

The platform has a set of tools that are allegedly designed to improve the DeFi experience, earn interest and have access to other services. Their website also reveals that DeversiFi has a partnership with Bitfinex, Ledger, DeFiance Capital, Consensys, and others.

More could be revealed in a future report. In the meantime, any scenario seems possible even a potential security exploit.

Over the past month, the Ethereum network records over $1,064,626,399 billion dollars in total revenue, or around 58x the total revenue of Bitcoin.

Non-fungible tokens (NFTs) minting and trading is still one of the most profitable use cases on Ethereum. On many occasions, the NFT mania has led to an increase in transaction fees and congestion on the network.

At the time of writing, ETH trades at $3,053 with sideways movement in the daily chart.