The Brave and the Braver

Some background:

What happened?

On June 6, Brave browser was found autocompleting addresses with its own referral codes for top cryptocurrency-related websites such as Binance, Coinbase, Ledger, and Trezor. Shortly after, the online community began complaining about how this practice didn’t uphold the user privacy focus they’ve been striving for.

Their developers issued an apology, and explained that the issue was caused by a bug in the autocompletion function. Brave’s CEO Brendan Eich stated on Twitter that the team won’t be taking any revenue from Binance for those “bogus default completions”. Although they admitted using affiliate links as a monetization strategy, it was clarified that said links are not set up by default for autocompletion, which is selected when a user presses “enter” in the URL bar. Additionally, there is an option to disable Brave suggestions in browser settings.

Was it OK from Brave?

Certainly, displaying browser’s own affiliate codes in search suggestions has always been a controversial monetization strategy. However this is no new practice, as almost all major browsers — including Firefox — use a similar strategy with search engines by appending the referral source to the search query. “This is industry-standard since Safari’s Google deal in 2003”, reads Brave’s official response.

Nevertheless, some of the users felt an apology was not enough, so they forked Brave and create a new browser, called “Braver”. The team behind Braver is planning to strip out several of the original project’s feats, including BAT functionality, referral link injections, sponsored images, in-browser BAT promotions, and the ad-viewing rewards program.

Brave’s CEO warned that deleting all major monetization mechanisms will leave the new project without necessary funding for future development.

Ethereum fee market

What is behind the multi-million ETH transfer fees?

Two mysterious Ethereum transactions paid more than $5 million worth of ETH in transaction fees, which is believed to be caused by a hack. Previously, similar transactions with extremely high fees were considered to be a part of a “mining money laundry” scheme.

According to the Chinese media outlet Chainnews, the analysis firm PeckShield suggested that a crypto exchange was compromised. A few days later, it was known that the South Korean P2P exchange Good Cycle was, in fact, the victim.

Good Cycle — as per the analysis firm report — seems to be a ponzi crypto project designed with several security flaws, which supposedly enabled a group of hackers to access some of its operational functions. However, due to multisignature restrictions, they were unable to withdraw the funds. Because of this, the group deliberately spent millions in gas fees to blackmail the exchange into paying a ransom.

The mining pools responsible for processing these high-fee transactions were SparkPool and Ethermine. Both pools claimed that they were waiting for contact from the sender in order to resolve the situation. After four days of receiving false refund claims, Bitfly-owned mining pool Ethermine decided to distribute the $2.6 million-worth ETH transaction fee among the miners of its pool. They also clarified that moving forward, all transaction fees will be distributed among pool miners, regardless of the size of the fees. Sparkpool, on the other hand, was about to do the same on June 17, but since Good Cycle was able to contact them in time, it is unknown the outcome of this situation at press time.

It is worth noting that the Ethereum Improvement Proposal (EIP) 1559 is designed to tackle this and similar issues by replacing the auction-based fee market with fixed fees.

Ethereum transaction fees are on the rise since April, reaching the average of $0.63 fee per transaction on June 15. Meanwhile, Bitcoin miners adjusted to smaller block rewards after the halving, so average BTC transaction fees are declining for one month straight from May’s highs of $6.7 to June’s lows of $0.55 per transaction.

In other news

The information in this newsletter is not intended to constitute legal, financial or investment advice and should not be construed or relied upon as such. Any opinions reflected are the opinion of the author(s) of the newsletter only and not necessarily LocalEthereum Pty Ltd. We recommend that before making any commitment of a legal or financial nature you should seek independent advice from a qualified legal, financial or investment adviser.