Ethereum Validators Agree To Scale Blockchain And Reduce Costs By Increasing Gas Limit To 45 Million Units

Network throughput on Ethereum ticked up on Sunday as the blockchain’s gas limit rose beyond 37.3 million units. This is over 3% higher than the levels observed late last week, with several blocks proposing higher gas limits.

The gas limit refers to the maximum amount of gas fees or Ether (ETH) a user is willing to pay for executing transactions or smart contracts on the Ethereum network. It serves as a cap on the computational work that can be performed on the blockchain, preventing excessive use of network resources.

Ethereum’s Gas Limit Raised to 45 Million After Nearly 50% Validators Supported the Proposal to Reduce Costs

Ethereum co-founder Vitalik Buterin confirmed in a July 20 X post that Ethereum’s gas limit has been raised from its current range of 36 million to 45 million units. An overwhelming majority of validators signalled their support for the update, which they believe will reduce transaction costs and enable improved network scaling. 

According to Gaslimits data, about 49.3% or more than 500,000 validator addresses agreed to increase the gas limit from its existing range, which also represents the first significant climb since February, when it was raised from 30 million to 36 million units.

While the latest limit is significantly lower than the previously proposed 60 million, it is still a 25% increase from current levels. Higher gas limits translate to increased transaction throughput on Ethereum’s base layer (L1), thereby enhancing its transaction capacity.

DeFi infrastructure firm Sumcap reported that the result of the increased limit is already visible on the network, with gas usage gradually climbing in alignment with Ethereum’s long-term target of 150 million units per block. As per Chainspect data, network throughput hit 18 transactions per second (TPS) over the weekend, increasing from the 15 TPS limit following February’s update.

Ethereum developers have long been rallying to raise the Ethereum gas limit, even launching the “pump the gas” campaign in March 2024 that proposed increasing the limit from 30 million to 40 million, claiming it would reduce transaction fees on its Layer-1. However, some developers have concerns with raising the bar, citing it would cause the blockchain to experience strains from resource-intensive transactions.

Ethereum Co-founder Vitalik Buterin Proposes Limiting Gas on Individual Transactions to 16.77 Million Units, Balancing Performance and Security

To address these risks, Buterin and Ethereum researcher Toni Wahrstätter recently put forward the Ethereum Improvement Proposal (EIP) 7983, which aims to apply a cap on gas usage per transaction. EIP-7983 limits the maximum gas for individual transactions at 16.77 million units. The duo claimed that this limit can enhance the blockchain’s performance without limiting its security.

Under Ethereum’s current network architecture, a single transaction can theoretically consume the entire block’s gas limit, posing the threat of denial-of-service (DoS) attacks that can eventually lead to unpredictable network behavior. By capping individual transactions, EIP-7983 seeks to distribute gas consumption more evenly across the chain, reducing the chance of single transactions overwhelming block capacity.

The proposal is also designed to improve Ethereum’s compatibility with zero-knowledge virtual machines (zkVMs) by encouraging larger transactions to be split into smaller chunks. As per the draft, transactions that require gas units beyond the 16.77 million limit would be rejected during block validation, ensuring they cannot be included in newer blocks. The cap is independent of the overall block gas limit, which validators can adjust within existing consensus rules by about 0.1% per block.

Buterin and Wahrstätter’s reason to choose 16.77 million as the cap was to balance Ethereum’s computing complexity and performance, arguing it accommodates advanced decentralized finance (DeFi) use cases and smart contract deployments without inviting unnecessary risks. While EIP-7983 isn’t backward-compatible for transactions that exceed the new limit, the authors noted that most existing ETH transactions fall well below the cap, minimizing its impact on regular users and developers.

Back in May, Vitalik called for simplifying Ethereum’s base protocol to boost the network’s efficiency, security, and accessibility, taking inspiration from Bitcoin’s more minimalistic approach. At the time, he proposed restructuring the blockchain’s core architecture across its proof-of-stake (PoS) consensus, transaction execution, and shared components to achieve a much leaner design within the next five years. He argued that the network’s growing complexity has led to longer development cycles, higher costs, and increased security risks.

Spike in Ethereum Network Activity Aligns with Surging ETH Price as a Result of Corporate Treasury and ETF Adoption

Meanwhile, Ethereum’s network activity has seen a considerable spike in recent months, with daily transactions increasing from around 1.1 million in April to 1.4 million in July, according to Etherscan data.

This heightened network activity is closely linked with an increase in the price of Ether, which has gained a whopping 54% over the past month. On Sunday, ETH hit a seven-month high of $3,800 as corporate treasuries and US-listed Ether spot exchange-traded funds (ETFs) continue to accumulate the second-largest cryptocurrency by market capitalization. 

According to StrategicEthReserve.XYZ data, around 56 companies hold 1.76 million ETH, worth $6.70 billion, in assets under management (AUM), representing 1.46% of the total supply, while the ETFs hold 5.24 million ETH ($20 billion) in AUM, accounting for 4.34% of the total supply.

At the time of writing, Ether (ETH) is trading at $3,813, up 1.58% in the last 24 hours.