- Transaction and gas costs on Ethereum have surged in 2020
- While the increase in Gas costs coincided with the DeFi craze, data shows that the sector is not the primary reason behind Ethereum’s clogged network
- The Ethereum-based Ponzi scheme Forsage drives transaction fees up because of its expensive registration procedure
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This year has become the year of DeFi. While the top Layer 1 blockchains compete for uses in the niche, Ethereum remains the king. The surge in daily active addresses and transaction fees on Ethereum suggests that DeFi is pushing the network to its limits.
While the network’s congestion brings Ethereum’s years-old scalability problem back to the table, the excessive demand for DeFi is favorable for the ecosystem development. Now, new data shows that contrary to popular belief, DeFi is not the major reason behind Ethereum’s clogged network.
Meet the Forsage Ponzi
On its website, Forsage positions itself as an “international crowdfunding” platform. However, it doesn’t showcase any projects that try to raise funds. Instead, users see how much partners can earn along with referral tiers.
A look at the project’s team information raises another red flag. There are no founders or team members, just two lines saying that Forsage “belongs to the community.”
The project’s videos promising daily payouts in ETH evoke memories of BitConnect. Albeit, without the infamous Carlos Matos, they are much less entertaining. In other words, Forsage is almost surely a Ponzi scheme. While a crypto Ponzi is nothing new, Forsage played a crucial role in distorting the organic dApp usage on Ethereum.
Recommended article: learn more about how to identify potential cryptocurrency scams.
The project currently ranks first by the number of users and the number of transactions on DappRadar, leaving the closest competitors behind by a large margin. A closer look at the on-chain data reveals that calls to Forsage’s smart-contract started to pick up in Q2, 2020, and significantly outpaced top-performing decentralized exchanges (DEXes).
Curiously, the mean USD value of Ethereum daily transaction fees started to pick up beginning in April…