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Citi Flags Address-Poisoning as Driver of Ethereum’s Activity Surge

Lower fees after the December Fusaka upgrade enabled mass dusting that inflated usage metrics with sub‑$1 stablecoin transfers.

Overview

  • Citi analysts say most of the recent uptick consists of transactions under $1, indicating scam-driven activity rather than organic growth.
  • Daily active addresses peaked near 1.3 million on January 16 and have eased to about 945,000, according to Etherscan and Token Terminal.
  • Researchers tracked smart-contract distributions of tiny USDT and USDC amounts to large batches of wallets, with 67% of new addresses receiving under $1 as a first stablecoin transfer and reported thefts totaling about $740,000.
  • Cyvers’ behavioral analysis points to address poisoning as a material contributor to the volume spike, while Bitcoin’s on-chain activity trended lower over the same period.
  • The fee-cutting Fusaka upgrade made high-volume micro-transfers economical, yet Ethereum still leads on-chain assets with more than $400 billion and a 56% share of stablecoins.