During a Reddit ask-me-anything (AMA) organized by the Ethereum Foundation’s research team, Ethereum co-founder Vitalik Buterin proposed a “modest” increase in the gas limit to enhance the Ethereum network’s throughput. Buterin highlighted that the gas limit has remained unchanged for nearly three years, marking the longest period without an increase in the protocol’s history.
Responding to a question during the AMA, Buterin expressed his perspective, stating, “Honestly, I think doing a modest gas limit increase even today is reasonable.” He pointed out that the last increase occurred around late 2021 with the implementation of EIP-1559, resulting in only a roughly 9% increase in actual average usage despite doubling the gas limit.
Buterin suggested a potential gas limit of around 40 million, indicating a 33% increase from the current 30 million gas limit reported by Etherscan. He justified this proposal by allocating gains from Moore’s law post-2021 between increased capacity and enhanced ease of syncing and verification.
The gas limit on Ethereum is a critical parameter influencing the network’s transaction processing capacity and smart contract execution. Buterin’s recommendation aims to balance the growing demand on the Ethereum network while ensuring efficient syncing and verification processes.
As Ethereum faces increasing network activity, gas prices have surged, averaging around 35 gwei or $1.89, according to Etherscan. This rise has been notable since the beginning of 2024, with higher fees observed for complex smart contract operations.
Ethereum gas fees experienced a peak of 150 gwei in May 2023 during the NFT craze, sparking a scalability debate. In November 2023, fees surged again amid increased NFT-related activity. Over the past year, Ethereum gas fees have seen a 141% increase, reaching a current fee of 0.9084 USD/tx according to data from Ycharts.
Rising fees have led users to explore alternatives, with layer-2 solutions like Arbitrum gaining popularity for faster and cheaper transactions. To address high fees, the EIP-4844 upgrade is proposed, designed to make sending layer-2 data to the mainnet cost-effective using blobs. The EIP-4844 upgrade is expected to go live in the first half of 2024.
From a price perspective, Ethereum recently surpassed the long-held $2,130 resistance level. However, the momentum has slowed, and the price is currently consolidating below the $2,600 level.
