PAX-Based Ponzi Scheme Uses 15% of All Ethereum (ETH) Gas, Becomes First Consumer After Tether (USDT)

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Mon, 05/25/2020 - 14:31
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Vladislav Sopov
Some may have thought that the times of huge crypto Ponzis like PlusToken, OneCoin or Quadriga were over. But a new giant has arisen
PAX-Based Ponzi Scheme Uses 15% of All Ethereum (ETH) Gas, Becomes First Consumer After Tether (USDT)
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Recently, a new Ponzi scheme based on cryptocurrency investments has been revealed, which started eating 15% of Ethereum (ETH) network resources.

Old but gold

This Ponzi is styled after the most infamous post-Soviet Ponzi scheme of the 1990s and utilizes the name of legendary Russian fraudster Sergey Mavrodi. 

The ‘crypto edition’ of this notorious scam pledges a monthly income of up to 30% and refuses to recognize itself as a high-risk product. It uses the Paxos Standard (PAX) ERC20-based stablecoin as an investment instrument.

Ponzi scheme becomes second gas consumer in Ethereum
Image by Ethereum Gas Station

At the moment, Ethereum (ETH) resources explorer Eth Gas Station indicates that this scam is the second largest user of gas in the Ethereum (ETH) network. Only the world leading stablecoin USD Tether surpasses it in terms of gas spent.

Etherscan statistics demonstrate 15,6% usage of network by scam
Image by Etherscan

According to the Gas Tracker by Etherscan, the address of this scheme is responsible for 15.66% of all gas usage in the Ethereum network

Renaissance for Ponzis

Such enormous gas consumption has already resulted in an upsurge of safe minimum gas fees in Ethereum (ETH).

If this scam continues its growth, the Ethereum (ETH) blockchain transactions may get stuck. This may be the first Ethereum (ETH) congestion not caused by NFT game euphoria nor price fluctuations.

The problem of scams abusing blockchain resources isn’t unique to Ethereum. Last November, the EOS blockchain was clogged up by a shady airdrop.

Its smart contract transactions made CPU usage in EOS skyrocket, which resulted in a wide-scale network collapse.

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About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

2,500,000 Ethers Locked in Ethereum 2.0 Deposit Contract as ETH Rejected From $1,250

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Fri, 01/15/2021 - 18:02
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Vladislav Sopov
Ethereum 2.0 enthusiasts deposited whopping sum in its contract launched six weeks ago
2,500,000 Ethers Locked in Ethereum 2.0 Deposit Contract as ETH Rejected From $1,250
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While crypto markets are trying to get out of the most painful correction in this bullish cycle, the Ethereum 2.0 deposit contract accomplishes another crucial milestone.

ETH2 deposit contract surpasses $3,000,000,000 level

According to leading Ethereum network observer Etherscan, the Ethereum 2.0 deposit contract (0x00000000219ab540356cBB839Cbe05303d7705Fa) allocated more than 2.5 million Ethers. New 32-ETH stakes are transferred to it every minute.

ETH2 deposit contract breaks above $3B
Image by Etherscan

As the correction of the Ethereum (ETH) price ended, ETH is changing hands at $1,225: the $1,250 level was too difficult for bulls to conquer. Meanwhile, even at press time, it is worth almost $40,000 to join the club of Ethereum 2.0 stakers.

Therefore, the USD-denominated value of assets locked in the contract surpassed $3 billion for the first time ever and keeps surging.

It should be noted that Ethereum 2.0’s deposit contract went live on Dec. 1, 2020, heralding the start of ETH2 Pase Zero or Beacon Chain, the inaugural stage of Ethereum 2.0.

Ethereum 2.0 “entry tickets” become really expensive

At press time, more than 52,267 addresses transferred money to the deposit contract.

Ironically, Black Thursday in Crypto (March 13, 2020) was the most convenient time to join Ethereum 2.0 staking with Ether at $95. Today, Ethereum (ETH) enthusiasts should pay 13 times more to have a minimum amount of Ethers required for staking.

Ethereum 2.0 is a proof of stake (PoS) iteration of the Ethereum (ETH) protocol. It replaces mining by staking and splits the whole Ethereum (ETH) network into several interconnected sub-chains (shards).

According to Staking Rewards analytical dashboard, annualized rewards for ETH staking are estimated between 10.4 and 10.6 percent.

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About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)