Ethereum Transaction Failures Hit Historic Records

Ethereum Transaction Failures Hit Historic Records

On 22 March, the Ethereum blockchain failed to process 707,267 transactions. This is the highest number of failed transactions since 2016.

According to CryptoQuant statistics, the network has experienced three significant spikes in activity since November — in December, February and now. There has been a steady increase in failed transactions over the past few months.

The issue of transaction failures can be described as alarming; at the most recent peak, 35% of all financial transactions failed. Interestingly, activity on the Ethereum network decreased on that day, so congestion cannot be considered the cause.

While Ethereum developers (Core Devs) have not issued any official statements, the situation is being actively discussed during working meetings (All Core Devs Calls). The problem lies in the smart contract code and cannot be resolved due to the lack of a mandatory audit.

Cryptomus analysts have identified another issue. The influx of new users leads to errors in fee calculations, and newcomers may also fail to account for network requirements.

Blocknative analysts have observed an increase in errors on the Layer 2 side and from MEV bots. A significant proportion of failed transactions are generated by bots attempting to execute arbitrage trades. If the terms of a transaction change before it is included in a block, the transaction is marked as 'failed'.