Ethereum Miracle Faces Scrutiny: Record Transactions Mask Massive Spam Campaign

Ethereum is experiencing what seems to be its moment of glory: it reached almost 2.9 million transactions in a single day last week, an all-time high that should set off all the optimistic alarms about the use of the network. However, researchers are unmasking an inconvenient truth: Much of that record activity doesn’t represent actual user demand, but a sophisticated address poisoning attack that takes advantage of artificially low fees following the Fusaka upgrade.

The Real Engine of Activity: Dust and Deception

On-chain analysis by researcher Andrey Sergeenkov reveals that approximately 80% of the unusual growth in new Ethereum addresses is linked to small stablecoin transfers. The mechanics are simple but effective: scammers distribute micro amounts of USDT and USDC to hundreds of thousands of wallets, creating massive noise that distorts network metrics.

Stablecoin dusting works like this: criminals generate wallet addresses that closely resemble legitimate ones, then send microscopic transfers (often less than $1) to potential victims. When those transactions appear in the history, they insert fake addresses precisely where users copy addresses relying on the shortened prefix and suffix. A simple mistake when copying and pasting ends up with real backgrounds disappearing towards the attacker’s direction.

The numbers are telling: out of 5.78 million addresses analyzed, roughly 3.86 million received what Sergeenkov classifies as polluting dust in his first interaction with stablecoins. 67% of newly active addresses received less than $1 as an initial transfer, a pattern that clearly does not represent organic adoption but criminal orchestration.

The Economic Factor: When Spam Becomes Profitable

Until recently, this kind of mass-scale attack was economically unfeasible. Transaction fees on Ethereum kept these schemes out of the hands of conventional criminals. But the situation changed drastically in early December with the Fusaka upgrade, which significantly reduced the network’s operating costs.

Suddenly, sending millions of transfers of low-value powder became a profitable business. What was once a low-probability scam dependent on occasional errors has now transformed into a systematic and economically viable strategy. Sergeenkov documents how specific smart contracts distributed stablecoins to hundreds of thousands of wallets, funded by functions designed precisely to execute this kind of industrial-scale poisoning.

Markets in disjunctivity: the mirror that Ethereum does not reflect

Ether’s price response tells a very different story than transaction volume. As Ethereum recorded its busiest day, ETH held around $3,190 on Monday with a roughly 0.7% drop in the 24 hours. In the current context (January 29), the cryptocurrency is trading at $2.78K with a 7.90% drop on the day, lagging behind the general market indices.

Bitcoin faced similar pressure, falling from the $92,738 reported days ago to $83.69K today, down 6.38% over the past 24 hours. This disconnect between record volume and weak price performance confirms what analysts suspected: activity does not reflect fundamental strength but artificial noise.

Safe-haven Assets in Times of Geopolitical Tension

As Bitcoin and Ethereum weakened, gold soared toward all-time highs near $4,675 during early Asian trading. Fears of a trade war, stoked by tariff threats on European countries, redirected capital into safe-haven assets. Wall Street analysts project that gold will reach approximately $5,180 during 2026, implying potential gains of 19.3% from the close of 2025.

Japan did not escape volatility: the Nikkei fell by around 0.7% as 40-year government bond yields hit new highs. Political uncertainty over a potential early election added additional pressure on Asia-Pacific markets.

Beyond Spam: The Crypto Landscape

The crypto ecosystem continued to generate diversified headlines. Vitalik Buterin, founder of Ethereum, renewed his calls for “different and better DAOs,” suggesting that decentralized governance still requires significant innovation. On the collectible digital asset front, Animoca Brands’ Yat Siu reaffirmed that NFTs are not extinct, although wealthy collectors continue to be the main drivers of the market.

Pudgy Penguins emerged as one of the strongest NFT brands of the current cycle, evolving from simple speculative “digital luxury goods” to a multi-vertical intellectual property platform. The strategy includes user acquisition through conventional channels (toys, retail partnerships, viral content) before onboarding them to Web3. The ecosystem already generates more than $13M in retail sales with more than 1M units sold, while its Pudgy Party game surpassed 500 thousand downloads in just two weeks.

Cooling Enthusiasm: Volumes and Volatility

Broad market indicators pointed to a significant cooling. Spot cryptocurrency trading volumes dropped sharply from $1.7 trillion in 2025 to $900 billion, reflecting both cautious investor sentiment and persistent macroeconomic uncertainty. Bitcoin miners pivoting their operations to AI infrastructure and high-performance computing continued to beat expectations, one of the few bullish narratives of the period.

The bottom line is clear: while Ethereum technically records record performance in onchain activity, the fundamental reality points to a substantial portion of that activity lacking real economic substance, functioning as noise generated by automated trading. Until the market can distinguish between real users and systematic spam attacks, the highs in gross transactions will remain as misleading signals rather than legitimate catalysts of value.