On November 9, US-based crypto exchange Coinbase shared via a blog post that it’s having difficulties in processing EOS-related transactions due to the increased traffic on the EOS Blockchain. As emphasized in the post, the degraded performance was caused by the massive airdrop of EIDOS token.
In the post, Coinbase revealed that the first signs of network congestion appeared on November 1. The crypto exchange decided to increase the amount of staked CPU in the EOS wallets under its control to be able to unblock client transactions. This move secured a sufficient amount of CPU time left on the Blockchain to process clients’ transactions.
In just four hours, Coinbase’s immediate solution cause the price of CPU time to hit 7.69 EOS/millisecond, a surge that accounts for over 100,000%.
In the blog post, Coinbase explained that the EIDOS token was released on October 31. Its distribution involves sending transactions on the EOS Blockchain from EIDOS’ smart contracts.
On November 1, several crypto exchanges have listed EIDOS/USDT trading pairs, meaning users that received the EIDOS tokens via the airdrop can sell them for Tether stablecoin.
However, to be able to sell the EIDOS tokens, the users had to increase the capacity of Blockchain to process transactions by leasing the network’s CPU time. The sudden increase in traffic sent the EOS network into congestion mode. As a result, the number of transactions users can broadcast on the Blockchain had been limited.
According to Coinbase’s findings, the amount of EOS transactions involving the EIDOS contract accounts for around 95% of the entire network’s activity. While in a congestion mode, regular users who don’t have many CPU resources would be unable to perform a transaction.
In the blog post, the crypto exchange clarified that there is nothing wrong with the EOS protocol itself and that the situation is just temporary.