Ethereum, the blockchain network known for its smart contract capabilities, is about to undergo significant changes. Co-founder Vitalik Buterin proposed a proposal that could boost the network’s capacity.
In a recent Ask Anything session on Reddit, Buterin discussed the possibility of increasing Ethereum’s block gas limit by 33%. The proposal, which aims to increase the gas limit from 30 million to 40 million, marks a potential turning point for Ethereum. The Ethereum co-founder commented:
Frankly, I still think it makes sense to modestly increase gas limits. Gas limits have not increased in almost three years. This is the longest in the history of the protocol (the 2x rise in the chart at the end of 2021 is “fake” in that it reflects the EIP-1559 transition – the “limit” has increased by 2x, but the actual average usage has only increased by ~9%. So, if we split the Moore’s Law benefit after 2021 50/50 between increased capacity and increased ease of synchronization/verification, this would mean an increase of around 40 million.
In particular, Ethereum’s block gas limit plays an important role in determining the network’s transaction processing capacity. It limits the total computational effort required to process transactions and execute smart contracts within a single block.
Potential impacts and industry response to proposed gas limit increases
Buterin’s approval of higher gas limits has sparked discussion among industry leaders. Martin Köppelmann, co-founder of Gnosis, acknowledges that this change could cause operational problems for nodes and potentially lead to increased costs.
Of course, this still doesn’t mean that increasing the limit doesn’t have its downsides. Yes – it will increase the cost of running a node, but it can be done without compromising Ethereum’s promise of stability and reliability, and it will make Ethereum more useful. increases…
— Martin Koeppelmann 🦉💳 (@koeppelmann) January 10, 2024
Despite these concerns, Köppelmann argues that the benefits, including upgraded network efficiency and capacity, are large enough to justify the adjustment. Coinbase’s Base blockchain contributor Jesse Pollak echoed this sentiment, expressing support for increasing the gas limit from 40 million to 45 million units.
I strongly support increasing it. @Ethereum Gas limit of 40-45m – there is network headroom and will benefit all parties https://t.co/GQb8SbavAY
— Jesse Pollak (jesse.xyz) 🛡️ (@jessepollak) January 10, 2024
If implemented, this proposed increase would allow more transactions per block, effectively improving network throughput. This change is especially important considering that Ethereum’s gas limit has gradually increased over the years, reflecting its growing usage and adoption since its founding in 2015.
Initially set at approximately 3 million, the average gas limit was gradually increased to reflect the network’s growth trajectory.
Ethereum’s recent market performance following spot ETF approval
Despite these technical discussions, ETH’s market performance shows optimistic signs. In the past 24 hours, the price of Ethereum has surged more than 10%, reaching a trading price of over $2,600.
This upward momentum is consistent with the broader market reaction to the U.S. Securities and Exchange Commission’s (SEC) recent approval of a Bitcoin spot ETF. This approval boosted the price of ETH and had a positive impact on Bitcoin and other altcoins.
Featured image by Unsplash, chart by TradingView