Ethereum validators are increasingly signaling support for raising the network’s gas limit, sparking debates about scalability, decentralization, and security. But, what will lead Ethereum price action going forward?
As of today, 10% of validators have backed raising the gas limit above 30 million, a significant rise from just over 1% earlier this month. Supporters claim such a change could cut transaction fees by 15 to 33%, but others warn it could also pose risks to the stability of the network.
The Ethereum community is pushing for an increase in the network's gas limit. Currently, 10% of validators support raising the gas limit to more than 30M, which is expected to reduce Ethereum transaction fees by 15% to 33%. However, raising the gas limit too quickly may pose a…
— Wu Blockchain (@WuBlockchain) December 19, 2024
Ethereum Validators Push to Raise Gas Limit for Lower Fees
The effort to raise Ethereum’s gas limit continues with validators and developers trying to bring down high transaction fees on the network.
Former MakerDAO head Mariano Conti, together with core developer Eric Connor, launched the “Pump The Gas” initiative calling for the gas limit to be increased to 40 million. According to them, with a higher gas limit, user experience could be improved greatly by slashing Layer-1 transaction fees by almost 33% or more.
Today, @nanexcool and I are launching an effort to help raise the Ethereum gas limit from 30mn to 40mn
This can result in a 15-33% reduction in L1 tx fees
We are calling on solo stakers, client teams, pools and community members to help#pumpthegas https://t.co/TYoyI35cle
— eric.eth (@econoar) March 19, 2024
In its initiative, it asks solo stakers, client teams, and validators to support this increase, citing that the constraints on gas at the moment hold back Ethereum’s growth.
A few days ago, junior Ethereum researcher Justin Drake configured his validator for a 36 million gas limit, which he deemed 20% safe to improve network efficiency. Drake suggested that this change would “safely grease the wheels” and allow Ethereum to safely process more transactions per block.
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Developers such as Emmanuel Awosika, creative director of 2077 Collective, have pointed to benefits for high-demand applications.
Gas limits are limiting the deployment of ambitious projects, especially ones that experience viral growth on the network,’ Awosika said. He argued that with lower fees developers will be able to build scalable applications without the user experience suffering due to rising gas prices.
Lower Fees Could Boost Competitiveness, but What About Ethereum Price?
Raising the gas limit could make Ethereum more competitive with rival blockchains like Solana and Binance Smart Chain, which boast lower transaction fees.
Ethereum’s scalability challenges have often led to periods of congestion, driving users and developers to alternative networks. Lower gas fees could attract new projects and retain existing ones, particularly in the decentralized finance (DeFi) and non-fungible token (NFT) markets, where Ethereum remains dominant.
Developers argue that by allowing more transactions per block, the proposed gas limit increase could improve the network’s overall functionality.
Risks to Decentralization and Network Stability
Despite the potential benefits, critics warn that raising the gas limit too quickly could jeopardize Ethereum’s decentralization and security. Larger block sizes resulting from higher gas limits could increase computational requirements for validators, making it harder for smaller operators to participate. This could centralize power among wealthier validators, undermining Ethereum’s core principle of decentralization.
Toni Wahrstätter of the Ethereum Foundation has cautioned against a rapid gas limit increase, warning that it could strain the network’s stability. He then said larger blocks take up more storage and bandwidth and that could be an obstacle for solo node operators. The Pump The Gas campaign recognizes these risks, and indeed urges gradual change rather than abrupt change.
Ethereum Price Trends Amid Gas Limit Debate
Etheruem price fluctuation is now coinciding with the ongoing discussions over the changes in the gas limit. According to analyst VipRoseTr, ETH is trading within a corrective range, where key support is at $3,419.78, according to Fibonacci retracement levels. A breakout above $4,100 would confirm a bullish trend, they say, and could propel the price to $5,000.
If it fails to hold the $3,419.78 level as support, Ethereum price could hit lower levels like $3,247.72. Onchain data, however, suggests despite short term volatility, long term Ethereum holders remain undeterred. Long term investors now hold over 110 million ETH tokens, which shows confidence in the future of Ethereum.
The outcome of the gas limit debate could influence Ethereum’s market performance. A successful implementation with minimal risks could boost investor confidence, while mismanagement of potential pitfalls might weigh on sentiment. The balance between scalability and security will be critical in determining Ethereum’s trajectory in the coming months.
