The growth of layer two protocols has been one of the top stories of 2021, as the increasing popularity of decentralized finance (DeFi) and non-fungible tokens (NFT) have raised transaction costs on Ethereum (ETH) price network effectively to many participants.
Earlier this year, the Polygon network, formerly known as MATIC, emerged as one of the top contenders in the race for an effective Ethereum layer 2 scaling solution, and the project's QuickSwap DeFi platform was also one of the clones. most successful Uniswap.
The platform was quite popular at first, but as other platforms such as Arbitrum and Optimism appeared, discussions of Polygon fell by the wayside and some traders even refer to the platform as "slow". Data from Flipside Crypto shows that the low-cost capabilities of the Polygon network came under attack after a cleverly designed arbitrage bot handled 14 Ether at 218.5 Ether in less than four months.
The bot filled each block with "meaningless transactions"
According to data From Flipside Crypto, the attack began in early May, and at one point in June, the transactions driven on the Polygon network reached 8 million per day. In the same time period, the maximum number of transactions on the Ethereum network was 1.2 million.
Data found in a Polygon forum indicates that the attacker has been inflating transaction volumes by up to 90% by filling each block with "meaningless transactions" while only having to pay around 0.02 MATIC to spam the entire block. and about $ 1,000 for one day.
A deeper dive into the transactions and addresses that interact on the network revealed that around 30% of the network's transaction count came from two contracts that were determined to be arbitrage bots conducting thousands of daily transactions to various decentralized exchanges ( DEX).
The exact reason why the spammer chose to fill each block when bots were only making between 2,000 and 4,000 trades per day is uncertain, but one theory is that it was done in an effort to prevent someone else from handling the trade up front.
Related: Polygon may hit $ 3.50 in Q4 as MATIC's weekly 20% rally triggers bullish flag setup
The bot made $ 6,800 in average daily earnings
Over a period of 120 days, the bot was able to raise an initial amount of 14 Ether to 218.5 Ether, which is currently worth $ 813,694.
That works out to an average daily profit of about $ 6,800 before including the cost of spamming the network.
In response to the spammer, the team behind Polygon ultimately decided to increase the minimum cost of a transaction from 1 gwei to 30 gwei as a way to combat spam and improve network health.
The movement appears to have achieved its intended goal as data provided by Delphi Digital shows that the increase in average transaction costs coincided with a marked decrease in the number of daily transactions because it now costs $ 30,000 to spam the network for an entire day.
Data from the network shows that spam transactions have dropped from 2 million to 500,000 transactions per day, a decrease of 75%, but still account for 16.7% of daily transactions. This means that the bots are spending roughly $ 5,000 of their daily earnings of $ 6,800 on gasoline to keep the scheme running.
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