The Surge Behind Ethereum: A Scam in Disguise
Citi Bank's latest research reveals that the recent surge in Ethereum transaction volume and active addresses isn't due to real user growth, but is closely linked to a scam known as 'address poisoning.' This tactic involves sending micro-transactions that closely resemble a user's frequently used addresses, tricking them into mistakenly transferring funds to the scammer's wallet.
The Spread of Low-Cost Scams
Due to Ethereum's relatively low transaction fees, scammers can send small amounts of tokens to numerous wallets at scale. These transactions often amount to less than $1, but they're designed to confuse users into sending larger sums to the scammer's address in subsequent transactions.
Data Reveals a False Boom
Studies show that around 80% of newly active addresses are linked to stablecoin micro-transfers, indicating that Ethereum's growth is primarily driven by malicious activities rather than genuine usage. This misleading surge masks underlying issues in the network's health.
Contrast with Bitcoin
Citi notes that in contrast to Ethereum's unusual growth, Bitcoin's active address count is on the decline. This trend also explains why Ethereum's price performance has lagged behind Bitcoin's in recent weeks.