As ETH prices surge, Ethereum GAS limit raised to 15 million

Ethereum's gas limit sets an upper limit on the number of operations that can be included in each block. As the price of Ethereum (ETH) rose 2.8% to $2,456 on the day, on-chain activity is increasing. This is the seventh time in Ethereum's history that miners have voted to increase the gas limit as a temporary solution to rising network fees.

Miners raised Ethereum’s gas limit to nearly 15 million for the first time to ease transaction congestion. As the price of Ethereum (ETH) rose 2.8% on the day to $2,456, on-chain activity is increasing.

Ethereum’s gas limit, which sets an upper limit on how many operations can be included in each block, was set at 12.5 million by miners before the cap was raised, until Ethereum creator Vitalik Buterin suggested on Reddit last week that the limit should be raised due to recently activated code optimizations on the network.

“Now that the blockchain is more secure, we can raise the gas limit, which will make every application cheaper,” Buterin said.

As ETH prices surge, Ethereum GAS limit raised to 15 million

What is "GAS"?

As software developer Kevin Ziechmann explained in a blog post on the Ethereum Foundation’s website:

“GAS refers to a unit of measure of the amount of computational work required to perform a specific operation on the Ethereum network…GAS is paid in Ethereum’s native currency, ETH. The price of GAS is expressed in Gwei, which is itself a denomination of ETH — each Gwei is equal to 0.000000001 ETH.”

As background, the GAS cap limits the amount of data and computation a miner needs to process a block on the network. The cost of each unit of GAS in ETH is determined by the user, who can set a high or low GAS price. Miners prioritize transactions and operations with high GAS prices (and therefore, higher overall transaction fees) to maximize the rewards they receive on the network.

Due to limited block space and increasing on-chain activity, Ethereum's gas fees have been soaring. Depending on the type of transaction, the associated fees can range from a few dollars to hundreds of dollars.

As ETH prices surge, Ethereum GAS limit raised to 15 million

Increasing the gas limit allows for more data to be included in each Ethereum block, which could include various operations such as peer-to-peer transfers of ETH, creating a new smart contract, or exchanging Ethereum-based fungible and non-fungible tokens.

Why do Ethereum miners want to increase the GAS limit?

There are potential risks when it comes to raising Ethereum’s gas limit. Larger blocks require more energy from miners to process and finalize, and can increase the likelihood of forks and orphan blocks. This is why there is a limit on how fast Ethereum miners can increase the gas limit.

“As a function of the ethereum protocol, miners can only adjust a block’s gas limit by 0.0976% of the previous block’s gas limit,” CoinDesk’s Christine Kim explained in a research note. “When miners collectively agree that a block’s gas limit is too low or too high, they can slowly work to raise or lower that limit with each successive block.”

Since the completion of ethereum’s latest backwards-compatible system-wide upgrade, also known as a “hard fork,” major mining pools have been signaling their intention to increase the gas limit from 12.5 million to 15 million.

On April 20, Bitfly, operator of Ethereum’s second-largest mining pool (by hash rate), tweeted:

“This is the seventh time in Ethereum’s history that miners have voted to increase the gas limit as a temporary solution to rising network fees. While raising the limit, Ethereum developers are also working on a parallel blockchain network, dubbed ‘Ethereum 2.0,’ to reduce the problems of high fees and network congestion in the long term.” (CoinDesk)