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- 1 Vitalik Buterin’s new announcement about a 30% gas limit hike has created quite a buzz in the crypto markets.
- 2 Crypto users are hopeful that it would bring some great possibilities to the Ethereum ecosystem.
Ethereum founder Vitalik Buterin recently announced a hike in the gas limit by 33%. For all obvious reasons, this could become a game-changer for Ethereum. It’s already quite the dominant blockchain in the crypto space. With this new update, the network could become much more efficient than it already is. Many crypto users are stoked about this announcement and they are already speculating about its probable impact on the markets.
Given the impact of the gas fee increase, this is not surprising. So let’s quickly get into it and see what’s there to learn about this recent news.
Decoding the Big Announcement
With a 33% higher gas limit, the Ethereum network will attain higher transaction capacity. It would also reduce the fee amount for end users. Notably, the computational complexity involved in the transaction determines the gas fee. For instance, a token swap costs less than a lending position. High or low, Ethereum users have to pay this fee to execute their transactions.
Essentially, the gas limit refers to the total amount of gas a single ETH block could take. The network executes hundreds or thousands on a regular basis. The result of the gas limit increase will be noticeable in the amount and complexity of transactions. Apart from the capability of the network, it would also enhance the operational costs for validators.
Interestingly enough, Buterin made this announcement in a Reddit “Ask Me a Question” session. He said that the gas limit hasn’t been raised for the last three years. He emphasized the fact that this has been the longest period without raising the gas limit for the Ethereum network. However, no one expected the increase to be 40 million gas units which is 33% of today’s 30 million limit.
The announcement arrived as a response to one question about safely increasing Ethereum’s gas limit. Moreover, this gas limit increase would not require a hard fork or a major update. The validators of the network will do it by simply tweaking some parameters in their node.While it might sound like a total surprise to some, it’s actually not.
From December last year, calls for increasing gas limits started cropping up. It started when some layer2 networks of Ethereum experienced high traffic. The co-founder of Gnosis Chain, Martin Koppelmann, even shared an X post related to this issue. He specifically asked the Ethereum blockchain to increase its gas limit.
As soon as the word was out, crypto users started to voice their opinions on X. Nearly all of them praised this move including Jesse Pollak, the head of protocols at Coinbase. Pollak is also the creator of the layer-2 blockchain Base. He even suggested that the gas limit be increased to 45 million. At the same time, some words of advice also made their presence felt. Dankard Feist, Ethereum core developer, suggested an increase in blobs per block as well as call data.
The crypto users who understand gas limits will surely understand the significance of this news. However, many new and potential users aren’t very familiar with this concept. Thus, let’s go through a quick explainer of gas before indulging in Ethereum transactions.
Understanding Gas and its Impact on Ethereum
In Bitcoin, the miners are rewarded with some portion of the crypto itself. Ethereum introduced the concept of gas to do the same. It used gas to compensate miners for their efforts and time. As mentioned above, the “gas limit” refers to the maximum amount of work validators put into a single transaction.
It also functions as a price per unit for the work done on a transaction. Thus, the cost of the transaction depends on the gas limit. On top of gas, users also pay tips for expediting their transactions. The lesser the overall cost of the transaction, the later it gets executed. By design, Ethereum is designed to boost the adoption of crypto in different domains.
It is also known as Ethereum Virtual Machine because it helps run various other applications. EVM works like a large virtual computer that can incorporate and manage other applications in its ecosystem. It should be noted that the gas fee keeps fluctuating and hasn’t changed much since the PoS rollout. The gas fee is essential to eke out incentives for validators.
Despite its mandatory nature, the Ethereum gas fee can be avoided. ETH users have found ways to avoid it or reduce the amount they pay, and here are some of those methods listed below.
Ways to Avoid or Reduce Ethereum Gas Fees
- The Ethereum gas fee is never static. It may remain stable for some time but it fluctuates eventually. So users can perform transactions when it’s low and pay less.
- Many apps offer discounts on the purchase of Ethereum. With them, users can minimize the overhead on transactions to a great extent.
- They can also monitor the network congestion and choose transaction types carefully.
- Also, they can use gas tokens to save on additional changes. They can earn them by getting rid of the variable assets.
- Another way of doing it is by calculating the gas fee in advance and doing the transactions accordingly. There are some tools that token holders can use to do that.
- All the users of Ethereum can switch to Ethereum 2.0 and pay a lesser gas fee.
Handling gas fees isn’t a difficult task if users are well-equipped with the required knowledge. Hopefully, the hike will make things much better for all ETH users.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
