Someone Paid $850K For Transaction Fees. In One Day

GM Readers. Your daily dose of BitDegree insights is up for grabs 👀

Today's selection:

📈When Transaction Fees Go Crazy
🏃‍♀️Last Chance
🕵️‍♀️️Binance.US Crash: The Truth
📰Bite-Sized News
👌Selected Meme of The Day

The Fear and Greed Index offers a generalized view of the current market sentiment

BINANCE SPENT A LOT ON TRANSACTIONS

Binance Paid $850,000 in Transaction Fees on the Ethereum Network. What's up?

A wallet associated with Binance (Binance 14) executed more than 140,000 transactions on the Ethereum network, according to data from the Dune platform. The fees for these transactions amounted to about 530 ETH (approximately $848,000 at the time of publication).

Etherscan, the analytics service, also confirmed the information about the numerous transactions.

The fees for some transfers exceeded 250 gwei, while the average was around 13 gwei, as seen on BitDegree.

According to on-chain analysts from Scopescan, the sudden spike in fees is associated with activities consolidating inactive deposit addresses on Binance.

This aligns with the fact that Binance recently added the feature to create more deposit addresses, rendering the old ones obsolete (when you deposit, make sure to double-check these, as reversing could be difficult).

In line with this, Martin Köppelmann, the co-founder of Gnosis, speculated that a suboptimal method for fund consolidation was used, resulting in a overpayment of transaction costs.

TL;DR: Binance paid $850,000 in Ethereum transaction fees for over 140,000 transactions, possibly due to inefficient fund consolidation methods.

LAST CHANCE

This is your LAST CHANCE to join and be eligible for our grand raffle of $500 in either USDT or USDC.

With the final week here, secure your entry to win! 🚀

First time hearing about this? Sign up NOW, and you'll receive $10 on your BitDegree account (relevant for everyone registered at any point in time!)

By now, only 13 people have completed the tasks, so the chances for you to win are super high!

Jump into the action.

And don't forget, Zealy is still running = more opportunities to seize extra rewards with new quests being added today! 😉

Binance.US CRASH: THE TRUTH

Aditya Baradwaj, a former employee of Alameda Research, has released a series of accusatory posts about the company's operations. Among other things, he claimed that Alameda was directly responsible for a glitch on the Binance.US exchange that resulted in an 87% dump in Bitcoin's price.

What Exactly Happened?

In October 2021, Bitcoin's price on Binance.US sharply dropped. The price chart showed a drastic one-minute 'red' candle, causing the asset's value to fall from $65,815 to $8,200.

Interestingly, on other exchanges, Bitcoin maintained a price above $64,000. Traders blamed the platform for the malfunction, pointing specifically to its order book. (remember when crypto used to cost so much??)

So, The situation was quickly stabilized, preventing catastrophic losses. According to a statement from that time time, the glitch was attributed to a bug in the algorithmic trading model of one of exchange's institutional partners.

That 'partner' turned out to be Alameda Research. Former employee Baradwaj mentioned he couldn't previously speak openly about the company's issues, but, by now, the circumstances have changed.

"This incident occurred a few weeks after I joined Alameda Research. I was just settling in and getting acquainted with our systems," he remarked.

According to Baradwaj, Alameda Research utilized two trading methods: algorithmic and manual. The latter was employed during high volatility or for arbitrage opportunities.

On October 21, as per Baradwaj, an employee tried to manually sell Bitcoin but made a mistake with a decimal point.

As a result, the trader sold the cryptocurrency at one cent per dollar. This massive underselling crashed the market and led to a sudden price drop, the former employee emphasized. The company lost millions of dollars.

"That's how things operated at Alameda Research - we waited for something to break, and then scrambled to fix it," Baradwaj stated.

He also mentioned that the ex-CEO of the FTX exchange, Sam Bankman-Fried (SBF), believed that rapid growth justified these risks, and this attitude was a core part of his philosophy.

By the way! Almost a year has passed since FTX's collapse, and SBF is expected to appear in court next month, October 2023.

TL;DR: Former Alameda Research employee Aditya Baradwaj has accused the company of causing a glitch on Binance.US in October 2021 that led to an 87% drop in Bitcoin's price. Baradwaj claimed that an Alameda Research employee's manual trading mistake, selling Bitcoin at one cent per dollar, caused the market crash.

BITE-SIZED NEWS