Ethereum’s Gas Limit Historical Context
In a recent Reddit AMA organized by the Ethereum Foundation’s research team, Vitalik Buterin highlighted the pressing need for a “modest” increase in the gas limit of the Ethereum network. Notably, this comes after nearly three years without any adjustment, marking the longest such period in the protocol’s history.
Buterin’s Perspective on Gas Fees
Responding to questions during the AMA, Buterin emphasized the reasonableness of a modest gas limit increase in the current landscape. He reflected on the last increase in late 2021, resulting from the implementation of EIP-1559, which doubled the gas limit but had only a marginal impact on actual average usage, increasing by approximately 9%.
Proposed Gas Limit and Justification
Buterin proposed a gas limit of around 40 million, indicating a 33% increase from the current 30 million, as reported by Etherscan. He justified this proposal by suggesting that allocating gains from Moore’s law post-2021 could enhance both capacity and ease of syncing and verification processes.
Balancing Demand and Efficiency
The Ethereum gas limit is a critical parameter influencing transaction processing and smart contract execution capacity. Buterin’s proposal seeks to strike a balance between accommodating growing network demand and ensuring efficient syncing and verification processes.
Ethereum Gas Fees Surge Amid Increased Network Activity
As Buterin advocates for a gas limit increase, Ethereum gas fees have surged, averaging around 35 gwei or $1.89, according to Etherscan. This increase, particularly notable since the beginning of 2024, is driven by higher fees for complex smart contract operations.
Historical Peaks and Current Fees
In May 2023, during the NFT craze, Ethereum gas fees reached 150 gwei. The scalability debate reignited in November 2023 as fees surged again amid increased NFT-related activity. Over the past year, Ethereum gas fees have increased by 141%, reaching a current fee of 0.9084 USD per transaction.
Exploring Alternatives Amid High Fees
Rising fees have led Ethereum users to explore alternatives, with layer-2 solutions like Arbitrum gaining popularity for faster and cheaper transactions. While Ethereum’s modular scalability approach may take time to materialize fully, users are actively seeking more immediate alternatives.
EIP-4844 Upgrade: A Potential Solution
To address high fees, the Ethereum Improvement Proposal (EIP)-4844 upgrade is designed to make sending layer-2 data to the mainnet cost-effective using blobs. Expected to go live in the first half of 2024, this upgrade presents a potential solution to the ongoing challenges posed by escalating gas fees.
Ethereum’s Price and Future Outlook
Despite recent successes, with Ethereum surpassing the $2,130 resistance level, the momentum has slowed, and the price is consolidating below $2,600. As Ethereum undergoes network upgrades and faces scalability challenges, decisions on parameters like the gas limit play a pivotal role in shaping its future.
