Ethereum’s top gas consumers are turning out to be Ponzi schemes that are competing with Defi applications for bandwidth on the ETH network. They make decentralized applications unusable because of the high fees as we are reading more in the latest ethereum news today.
Two Ponzi schemes on ETH, Contribute and Forsage is gathering 13% of the network’s total gas. Uniswap is the main gas consumer on ETH while tether takes the second spot. Higher fees and long confirmation times impede the growth in the DeFi sector. It now seems that Ethereum’s top gas consumers are Ponzi schemes which are increasing the bad congestion and are jacking up the transaction fees.
Uniswap and Tether are the top gas consumers on ETH with a 30% and 25% share among the top 25 on-chain consumers. Forsage follows closely behind and together with the emerging Ponzi scheme Contribute in the fourth position, both of the scams are taking up about 13% of the total gas on ETH. Contribute and the TRIB governance token is the newest Ponzi on Ethereum and it prides itself to be decentralized capital coordination which incentives early investors to earn more TRIB tokens according to the whitepaper.
Some of you who have been around for more than 5 minutes will remember Paycoin and the “$20 price floor”. Well, now there’s a smart contract ponzi called $TRIB (as in conTRIBute) doing the same thing. What could go wrong? pic.twitter.com/s4IKLFZx4e
— Riccardo Spagni (@fluffypony) September 20, 2020
No information on the composition of the liquidity providers was made public and the details about the scheme’s publisher Kento Sadim are not available online. Apart from the absence of founder details, there are other indicators that the project is a Ponzi Scheme like the floor price of the token. Like the Forsage registration.EXT function, which is called for the user registration from referrals, the smart contract for claiming TRIB tokens on Contribute is a computationally-intensive process that consumes a great deal of gas on ETH. TRIB’s smart contract takes up more gas than the other complex transactions such as the ones conducted by Chainlink.
Preston Byrne, the lawyer at Anderson Kill Law suggests that Paycoin and Contribute will face the Securities and Exchange Commission and their charges for fraud conviction and jail sentence. These Ponzi schemes are stopping the growth of the Defi space by clogging the network and destroying the crypto industry’s reputation. There’s no doubt that ethereum already reached its capacity in gas since they are at the maximum. A few months ago a transaction will go through in minutes but now the confirmation time for one transaction takes an hour.