High Gas Prices ⛽ Info & Resources

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High Gas Prices ⛽ Info & Resources

Hey there Ethereans! 👋 If you've tried to send a transaction in the last few months, you've probably noticed that gas prices have gone up quite a bit. For some (myself included!), sometimes it doesn't make sense to experiment onchain as much as I used to.

I'll shed some light on the context here in this post:

  • Resource List
  • Why Gas Prices are High
  • Are other chains as good as they claim?
  • Other Initiatives
  • How you can help

Resource List

Before sending a transaction, try out some of the tips listed here to see the best times or fee depending on your urgency.

Why Gas Prices are High

Simply put, Ethereum is getting more and more popular! Every day, we see new users starting projects in NFTs / digital art, DeFi, governance – all with passionate communities that want to use Ethereum mainnet. It's been amazing to watch the usecases grow over the past few years.

At the end of the day, this means competition between users. Gas prices are subject to their own markets of supply and demand. When there are a lot of users trying to send transactions, gas prices will increase to reflect that.

This is easy to see in times of high volatility. For example, with the recent drop in ETH price on Feb 23, gas spiked to over 1000 gwei as people tried to move their DeFi positions and arbitrage bots cleaned up market imbalances.

Having a market for block inclusion (measured by gas prices) is important because blockspace is limited. This means that there's a cap to what can be included per block. Here's a chart of the block gas limit over time. If there wasn't a limit to the size of blocks, then any sort of data could be put onchain for near 0 cost – this would break the chain.

In the near term, high gas prices may fluctuate, but over the long term, mainnet Ethereum may see sustained high gas prices when compared to previous years. Emerging Layer 2 solutions, which package many thousands of transactions to settle back to mainnet, will be able to pay a much higher gas price.

If you are interested in diving deeper, check out this report from 0x researcher Remco Bloemen: Scaling DeFi — Layer One

What are L2s and which ones should you try?

L2 stands for "Layer 2" – this is a big umbrella term for chain constructions linked to a base chain (Layer 1) in some way. While there's a wide range of designs, they all offload some of the demand from mainnet Ethereum while maintaining some or most of the security guarantees.

We're so excited about L2s because they will bring a new flavor of scaling before the merge with Eth2 is ready. Scaling means lower transaction fees! Here's a list of L2s that are live now or soon that you can try out. Remember, even though these protocols are promising, they are still early versions that will need to be battle hardened over time.

  • ZkRollups
    • Loopring – Exchange and Payment Protocol
    • StarkEx – Starkware based Exchange that hosts Deversifi (Exchange), Immutable (NFTs), and dYdX (perpetual contracts)
    • zKSync – scaling and privacy engine for Ethereum
  • Optimistic Rollups
    • Arbitrum (on testnet) – rollup built by Offchain Labs
    • Fuel – "Fuel empowers any person on Earth with fast, secure, and cost efficient ERC-20 transfers and swaps using the world’s most efficient Optimistic Rollup"
    • Optimism (live in March) – Instant transactions and scalable smart contracts
  • Sidechains (Technically not L2, but they are often used for similar purposes)
    • Polygon (fka Matic) – a protocol and a framework for building and connecting Ethereum-compatible blockchain networks
    • xDAI – a stable payments blockchain designed for fast and inexpensive stable transactions

Are other chains as good as they claim?

You may also heard other chains claiming "come to ____ chain, we've got low / no fees!!" While on the surface it may seem appealing, there's probably more being left unsaid. A few potential explanations:

  • They cut corners on decentralization – most frequently by increasing the hardware or bandwidth requirements for nodes. Ethereum takes this very seriously, and will only scale responsibly.
  • They are hiding the true costs – like requiring users to stake funds to send transactions
  • They will eventually run into the same issues as Ethereum – more users will inevitably lead to more congestion.

Other Initiatives

  • Near Term (weeks / months):
    • Turbogeth – this is an experimental Ethereum client that rearchitected Geth to create a more performant client. Everyone should try to run a Turbogeth node to help them get ready for a full release! The strategies for state management TG is using, once present in other client implementations, may allow for a safe increase to the block gas limit while also maintaining the ability for consumer hardware to run nodes.
  • Medium term (~4 months)
    • Eip-1559 – Potentially being included in the London network upgrade in July, 1559 comes with a whole host of benefits
      • more predictable tx inclusion (important for L2s like rollups)
      • elastic blocksize
      • reduce some MEV
      • balance issuance w/ burn: a potentially steady cap asset that is still secure
      • in protocol congestion oracle – (very important for L2s like rollups)
  • Long term (~12 months)
    • Eth2 – Proof of Stake, also called Serenity will also increase the total available blockspace through sharding. The Beacon Chain (the first piece of Eth2) is already live since December 2020, and the first hard fork is expected in mid-2021. The merge, projected for Q4 2021 / Q1 2022, will unite Eth1 and Eth2.

What you can do to help

To start, point people to this post – this info is only useful if it gets in front of people!

Comment your gas suggestions / hacks – I'll make sure to update the list at the top with the best ones.

You can also try out the L2 solutions as they go live, give feedback about the onboarding experience, and ask exchanges to support withdrawing directly to L2s. This will improve the experience for the existing community and everyone else coming soon.

Ethereum has an exciting future, and we're going to build it together! 🚀

submitted by /u/trent_vanepps
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