Data shows someone has today paid 93 ETH in fees for a transaction on the Ethereum blockchain; here’s the likely reason behind this seemingly abnormal transfer.
This Single Ethereum Transaction Took A Fees Of 93 ETH To Be Possible
At a first glance, 93 ETH in fees, and that too for a single transfer, seems simply absurd. Even for the Ethereum network, which is notorious for having periods where the fees reaches sky-high values, it feels too ridiculous to be true.
So, why was such a high amount of fees been paid for this transfer? A look at the chart for the average fees confirms that this is, in fact, not because of the network activity being too high or anything.
Looks like the metric has a relatively low value right now | Source: YCharts
As the graph shows, the current Ethereum fees is at a pretty low value when compared to the rush periods of the last three years.
But despite this, a seemingly insane fees was paid for the transfer. A look at the details of the transaction chain could perhaps be revealing about its intent.
Here is data from the Ethereum blockchain explorer platform Etherscan that shows the relevant info regarding the transfer:
The addresses and the amounts involved in this transfer | Source: Etherscan
From the transaction chain above, it’s apparent that the sender was an MEV bot. Bots of this kind keep a track of the Ethereum mempool to see in advance which transfers will be added to the blockchain next.
Here, this MEV bot seems to have been working as an arbitrage trader, going through exchanges to map out a transaction that will turn out a profit from the price differences listed on each of them.
The bot started with around 0.245 Wrapped ETH at first, and swapped the coins for 35.7k MCB on Uniswap V2. Then, it shifted these for about 234.9k SPELL.
Finally, the bot transferred the coins to Sushiswap, where it converted the SPELL back to Wrapped Ether, ending up with a whopping 96.17 WETH!
The bot certainly made some clever trades, going from just 0.245 ETH all the way to 96.17 ETH. However, as there are a large number of bots looking to exploit liquidity differences like this, the first one to finish the transfer ends up taking the spoils.
To make sure that the transfer gets processed first, the MEV bot decided to attach an outlandish fee of 93.11 ETH to it, and ended up successfully outcompeting the others.
However, despite this massive fee, the bot still ended up making a profit of almost 3 ETH; not too shabby of a return from an initial investment of 0.245 ETH.
At the the time of writing, Ethereum’s price floats around $1.2k, down 6% in the last week.
ETH seems to have declined in the last few days | Source: ETHUSD on TradingView
Featured image from DrawKit Illustrations on Unsplash.com, charts from TradingView.com, YCharts