The rise of Layer 2 protocols was one of the main stories in 2021, as the growing popularity of decentralized finance (DeFi) and non-holding tokens (NFT) led to higher transaction costs on the Ethereum network (ETH), which effectively valued many participants.
Earlier this year, the Polygon network, formerly known as MATIC, emerged as one of the top contenders in the race for an efficient Ethereum Layer 2 scaling solution, and the QuickSwap DeFi project platform has also been one of the most successful versions of Uniswap.
The platform was very popular in the beginning, but with the emergence of other platforms such as Arbitrum and Optimism, discussions about Polygon slowed down and some traders even called this platform “slow”. Flipside Crypto data shows that the low-cost potential of the Polygon network was attacked after a well-designed arbitrage bot managed to manage 14 Ether at 218.5 Ether in less than four months.
The penalty filled each block with “meaningless odds”.
According to Flipside Crypto, the attack began in early May, and at some point in June, the number of paid transactions on the Polygon network rose to 8 million per day. During the same period, the maximum number of transactions on the Ethereum network was 1.2 million.
The number of transactions on Ethereum vs Polygon. Source: Flipside Crypto
Data found on the Polygon forum shows that the attacker increased the transaction volume by up to 90%, filling each block with “meaningless transactions”, while you only need to pay 0.02 MATIC to spam the entire block, and around $ 1,000 per block. for every. day .
A deep dive into the interaction between transactions and addresses on the network revealed that approximately 30% of the number of network transactions originate from two nodes identified as arbitrage bots that perform thousands of daily transactions for various decentralized exchanges (DEX).
The exact reason the spammer chose to fill each block when the robots were only making 2,000-4,000 trades per day is unclear, but one theory is that it was done in an attempt to prevent someone else from taking a trade in advance.
RELATED: Polygon May Achieve $ 3.50 In Q4 As Weekly MATIC Rally Raises The Ox Flag By 20%
The robot had an average daily profit of $ 6,800.
Within 120 days, the fine was able to increase the initial amount from 14 ethers to 218.5 ethers, which is currently $ 813,694.
This is an average daily profit of about $ 6,800, excluding the cost of sending spam.
In response to the spammer, the Polygon team ultimately decided to increase the minimum transaction value from 1 gwei to 30 gwei as a way to combat spam and improve network integrity.
The move appears to have achieved its intended goal, as data provided by Delphi Digital shows that the increase in average transaction costs has coincided with a significant decrease in daily transactions, as it now costs $ 30,000 to send spam to the network. all day.
Average cost of polygonal gas compared to the number of daily transactions. Source: Delphi Digital
Network data shows that the number of spam transactions dropped from 2 million to 500,000 per day, down 75%, but still accounts for 16.7% of daily transactions. This means the robots are spending nearly $ 5,000 of their $ 6,800 daily profit on gas to keep the system running.