Buterin Proposes 33% Increase In Ethereum Gas Limit: Here’s Why
During a recent Ask Me Anything (AMA) session on Reddit, Vitalik Buterin proposed increasing the maximum amount of Ethereum gas to 40 million. Thus, the throughput of the second-largest crypto network can be enhanced.
Raising Ethereum’s Gas Limit
During the recent AMA session organized by the research team of the Ethereum Foundation, the Ethereum co-founder endorsed a “moderate” gas limit hike to improve the network’s throughput. According to the co-founder, it would be practical to implement a moderate increase in the gas limit at this moment. Buterin explained his reasons by providing concise calculations.
Based on his proposal, the increase would correspond to a 33% rise over the existing limit. The gas limit on the Ethereum network has increased steadily since its inception in 2015, mirroring the expansion of network usage and adoption. According to Etherscan data, the average limit was around 3 million then.
Role Of The Ethereum Gas Limit
In the Ethereum ecosystem, gas functions as the transaction fee, compensating for the computational resources required to process and validate transactions on the blockchain. Establishing a gas limit prevents blocks from becoming excessively large, which could adversely impact network performance and synchronization.
This limitation ensures that the Ethereum network maintains a balance, preventing congestion and facilitating smoother operations. Furthermore, validators responsible for producing blocks can dynamically adjust the gas limit within specified parameters, offering flexibility to adapt to varying network conditions.
Meanwhile, the proposal to increase the gas limit enables the accommodation of more transactions within each block. This increase could enhance the overall throughput and capacity of the Ethereum network. However, this approach has its drawbacks.
A higher gas limit, while potentially increasing efficiency, amplifies the strain on hardware resources. Furthermore, it introduces a heightened susceptibility to network spam and security threats.
Ethereum’s Average Gas Price
According to Etherscan, the current average gas price on the Ethereum network is 35 gwei ($1.89). However, these fees have fluctuated since the start of the year, particularly for complex smart contract processes.
The fluctuating costs mirror the complexity of Ethereum transactions. The current average cost for completing transactions is 35 gwei. In May 2023, these fees spiked, peaking at 150 gwei during the enthusiasm around inscriptions.
A gwei is an Ethereum unit representing one billionth of a single Ether (ETH). This fee increase heightened the scalability discussion within the Ethereum community as users faced the ramifications of growing transaction costs.
The Restaking Landscape And Ether’s Prospect
Restaking is a technique that enables users to stake the same amount of ETH on both the Ethereum network and other protocols at once. This novel solution improves security by leveraging Ethereum validators and staked tokens.
Ethereum’s robust security infrastructure can benefit from smaller, fledgling blockchains, reducing future attacks or failure risks. Although the list of restaking platform tokens is currently restricted, some assets have seen a price increase in the last 24 hours.
Pendle Finance leads the pack with a market capitalization of $164 million. Its native PENDLE token increased by 20% in a single day, hitting $1.73, but it’s still 30% down from its peak in May 2021.
Picasso (PICA), the second-largest restaking token by market capitalization, recorded a 20% growth in value over the same period, with its price currently at $0.024. Restake Finance (RSTK) experienced a 42% increase in a single day, reaching an all-time high of $2.64 on January 10, highlighting the increased interest in the restaking sector.
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