The Good Tech Companies - To Pump The Gas Or Not: Analyzing The Ethereum Gas Limit Debate

Episode Date: January 24, 2025

This story was originally published on HackerNoon at: https://hackernoon.com/to-pump-the-gas-or-not-analyzing-the-ethereum-gas-limit-debate. Delve into scaling Ethereum's gas limit debate, balancing scalability, security, and decentralization to optimize performance and innovation in blockchain. Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #ethereum-network, #ethereum-gas, #ethereum-gas-limit-debate, #ethereum-ecosystem, #ethereum-transaction-fee, #ethereum-transaction-pricing, #2077-research, #good-company, and more. This story was written by: @2077research. Learn more about this writer by checking @2077research's about page, and for more stories, please visit hackernoon.com. Ethereum's proposed gas limit increase sparks debate, balancing scalability, lower fees, and new DApp possibilities against risks to decentralization and security. Explore the origins, effects, and broader implications of this controversial change.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. To pump the gas or not, analyzing the Ethereum gas limit debate, by 2077 Research. Ethereum's proposed gas limit increase aims to enhance scalability, lower transaction fees, and unlock new possibilities for dApps by expanding network capacity. However, it raises critical considerations about decentralization, validator hardware requirements, MEV disparities, and the impact on network stability. Introduction The Ethereum community recently has been abuzz with discussions about a potential gas limit increase. The idea of increasing the gas limit feels intuitive, as it aligns with user

demand for higher transaction throughput and reflects the natural growth of network capacity over time. Many researchers and community members have expressed strong support, arguing that Ethereum is ready for this change and that it is a timely step toward directly enhancing Ethereum scalability. The proposal has also gained significant traction within the broader community. Websites like PumpTheGas.org have been created by the community to educate basics of gas limit increase and how validators can change their node setting. Another website, GasLimitPix, actively tracks the progress of validator support for a higher gas limit, revealing that 25% of Ethereum validators, as of December 21, 2024, have

already adjusted their client configurations in favor of the increase. If over 50% of validators agree on increasing the gas limit and modify their client configurations, Ethereum's gas limit will begin to rise and settle stably at the increased target. Notably, this proposal represents a distinction from Ethereum's roll-up-centric roadmap. Unlike recent scalability improvements such as EIP-4844 and EIP-7691, which focus on roll-up scaling and blob transactions, a gas limit increase is a NL1 scaling approach. While this has excited some parts of the community, it has also raised concerns among researchers about potential risks to Ethereum's core values of decentralization and security. Critics warn that larger worst-case block size scalds strain

the consensus layer and increase validator hardware requirements, potentially threatening network stability. This article examines the origins of the gas limit proposal, its potential impact, and the technical and some considerations that underpin the ongoing discussions. A short history of proposals to increase Ethereum's gas limit, the idea of increasing Ethereum's gas limit has been discussed for some time. During the Ethereum AMA in January 2024, Vitalik Buterin suggested that raising the gas limit to 40M could align with Moore's law, reflecting the steady improvement in hardware capabilities. Notably, Ethereum has not adjusted its gas limit since April 2021, over three years ago, despite significant advancements in hardware during this period.

Many now believe it is time for Ethereum to account for these developments. More recently, proposals have focused on a more ambitious target, doubling the gas limit to 60m. While this represents a significant leap and has generated excitement, it has also raised concerns about its potential risks. 60m is largely seen as a long-term goal rather than an immediate target. In December 2024, Tony Varstater recommended a more cautious approach, advocating for an incremental increase to 36M gas, a 20% rise, as a safer first step. At present, reaching 36M gas is viewed as the initial milestone, with any further increases expected to follow a gradual, step-by-step approach.

Careful monitoring of the network will be essential to ensure that Ethereum's core values of stability and decentralization are preserved. How can the block gas limit be changed? The block gas limit can be gradually increased without requiring a fork OR network rule change. Instead, validators modify their configuration options, enabling backward compatibility and allowing for periodic, flexible adjustments based on community consensus. Contrary to popular belief, Ethereum's block gas limit is not fixed at 30M. The block proposer can adjust it slightly within certain limits. Specifically, the gas limit of a block can change by up to 1,024th of the gas limit of the previous block. For example, if the gas limit of the current block is 30 million, it can increase to 30M plus 30M by

1,024 equals 30,029,296 in the next block. The code below demonstrates the default behavior of Ethereum nodes in GethClient. If a new block's gas limit falls within the acceptable range relative to the parent block, it will be considered valid. If consecutive block proposers agree to raise the limit, the gas limit can increase continuously. For example, reaching the first milestone of 36M, a 20% increase, would take approximately log 1.2 log 1025 1024 equals 187 blocks equals 38 minutes, in the ideal case assuming consensus among validators. Once more than 50% of validators agree, the increase can happen rapidly. What effects can we expect from raising the gas limit? Let's start with some of the more predictable effects of a gas limit increase.

Increased block capacity would make it easier to handle current blockchain demands, leading to lower gas fees. In the short term, this reduction in gas fees could result in less ETH being burned under the EIP-1559 mechanism, temporarily increasing Ethereum's net issuance. A similar trend was observed after EIP-4844, when drastically reduced data availability, DA, fees for rollups led to decreased ETH burn. The same effect could occur with a gas limit increase, further contributing to short-term inflation. In the longer term, however, lower fees are likely to encourage higher network activity, as more users can afford to transact. This increased activity could drive Ethereum's

network effect, attracting more DAs and fostering broader adoption. As Ethereum becomes more integral to decentralized applications and financial systems, ETH is likely to be used more frequently as a currency. The resulting higher ETH usage could, in turn, fuel further growth in network activity, creating a positive feedback loop for Ethereum's ecosystem. Building new dApps might be possible after the gas increase beyond reduced gas fees and improved transaction flow. Increasing the gas limit in a single block could unlock entirely new possibilities. While a moderate increase to 36M may not lead to significant changes, a larger leap to 60M could enable new types of dApps and transactions that

were previously constrained by the 30M gas limit. Certain operations, which nearly fill or exceeds the current gas cap of 30M, could be executed more efficiently or become feasible for the first time after the change. For example, transactions requiring substantial gas, such as NFT batch minting, large-scale token airdrops, or DAO activities, often approach or exceed the current 30M gas limit. These transactions are typically fragmented across multiple blocks, leading to inefficiencies, delays, and potential exploitation. A specific example shown in the

below figure is an NFT batch minting transaction, consuming over 28M gas. Increasing the block gas limit to 60M would allow such operations to be completed within a single block, ensuring atomic execution. This guarantees that the entire operation either succeeds or fails, avoiding partial completions and ensuring fairness for participants while reducing opportunities for manipulation. Beyond optimizing existing use cases, a higher gas limit could pave the way for innovative DApps that require computationally intensive operations. For example, on-chain AI applications, such as small-scale model training or inference, could become viable with higher gas limits.

Similarly, more complex smart contracts, such as fully on-chain games or sophisticated governance mechanisms, could thrive in a higher-capacity environment. These advancements could expand Ethereum's functionality and appeal, making the ecosystem more versatile. In many cases, doubling the gas limit could have more than a proportional benefit, as it would reduce fragmentation and unlock entirely new possibilities that were previously impractical. What does increasing the gas limit mean for the blockchain trilemma? Increasing the gas limit is fundamentally an effort to improve the scalability of Ethereum. In the context of the blockchain trilemma, achieving greater scalability often comes at the cost of decentralization or security. This is why the proposal to raise the gas limit

has drawn some skepticism, with concerns that it could lead to centralization by increasing validator requirements or weaken security by degrading the stability of the consensus layer. However, advocates argue that this isn't about compromising decentralization or security to boost scalability. Instead, they frame it as leveraging improvements in hardware performance, as described by Moore's law, to expand the total capacity of the blockchain. In this view, the triangle of the blockchain trilemma could be enlarged, as modern hardware allows for greater overall capacity without necessarily degrading Ethereum's core properties. To evaluate whether this is truly the case, it's essential to carefully examine the potential risks of raising the gas limit. Considerations regarding the decentralization

might include increased validator hardware requirements and sophistication of MEV maximal extractable value strategies. In terms of security, we should consider the increased worst case block size, the execution time of transactions, which can affect the rate of forked or missed slots. Gas limit increase in block sizes Increasing the gas limit in a single block allows for more call data to be included, which affects the worst-case block size. Currently, the maximum block size that can be achieved by filling a block with meaningless call data is around 1.8 MB, and with 6 blobs, the total data size propagated in a single slot can reach 2.58 MB. A higher gas limit would increase this worst-case block size, potentially leading to issues in the peer-to-peer P2P

layer that network notices to communicate. The worst-case block size constrain consensus clients in the P2P layer. When the gas limit exceeds 40 M, the worst-case block size could surpass constraints built into default client behaviors, causing some clients to fail at proposing or propagating blocks properly. This makes it critical to address these constraints before raising the gas limit significantly. Hopefully, EIP7623 offers a solution by adjusting the price of call data for data availability transactions, which could reduce the worst-case block size from 2.58 MB to approximately 1.2 MB. Adopting EIP-7623 would be necessary to ensure the consensus stability for any upcoming gas limit increases in the future. Likewise, the actual block size, the size of blocks typically filled with transaction data

correlates with the probability of reorged or missed slots analyzing slot data number 9,526,972 to number 10,351,782 reveals that for smaller blocks there is little difference in the distribution of block size between included slots and re-orged, missed slots. However, as blocks grow larger, e.g., above 0, 25 MB, the likelihood of re-orgs or missed slots increases. This correlation may stem from factors like the increased execution time of transactions or default P2P behaviors, rather than block size alone. While the observed relationship highlights potential risks, it does not establish causality. In summary, while block size increases can impact slot stability, worst-case block size is particularly critical for ensuring

P2P layer robustness. Future gas limit increases must be accompanied by changes like those proposed INEIP 7623 to mitigate these risks effectively. Gas limit increase in execution time since the gas limit increase allows more transactions to be included in the block, the execution time of transactions would also increase. Whether the increase will be critical or not depends on the forked or missed slots, representing the overall consensus stability. The chart below illustrates that as more gas is used in a block, the execution time tends to increase. A 20% gas limit increase is expected to slightly lengthen execution times, but the exact impact is difficult to predict. Execution time is not always directly proportional to the maximum gas limit org's usage. However, if we make a

conservative assumption of proportionality based on the chart, an increase of 400 to 500 milliseconds in execution time seems plausible. Now, let's examine the relationship between execution time and forked or missed slots. The red box in the left figure highlights that slots with execution times exceeding 4000 milliseconds are far more prone to being reorged or missed compared to slots with shorter execution times. While most reorged or missed slots occur within 1000 to 3000 milliseconds, indicating a weak correlation between execution time and reorg probability in this range, blocks in the red box show a significantly higher likelihood of reorgs when execution times exceed 4,000 milliseconds. The right figure reinforces this by showing that slots with

execution times over 4,000 M shave a reorg or missed rate more than three times higher than those under 4,000 milliseconds, emphasizing the impact of very high execution times on stability. Will validator hardware requirements be affected by a gas limit increase? One of the main concerns in validators when raising the gas limit is about the storage size of operating validator nodes. As of December 2024, a validator node has about 1.5 to 1.6 terabytes for maintaining all the history and state. The gas limit increase will accelerate the history growth and the state growth. In 2020 and 2021, the requirement of running a validator node was 2TB SSD. However, when the history and state data hits 1.8TB, validators using 2TB should replace their SSD into 4TB SSD. Although the price of 4TB SSD now and 2TB SSD 3 years ago are almost the same as about $250,

the replacement itself means maintenance costs and technical difficulties. 36M gas limit may not be a big deal here. But if the gas limit increases up to 60M or more, the validator nodes would have to keep replacing their hardware, stacking up the maintenance cost, threatening the decentralization property. When EIP-4444 is adopted, targeted for client releases by May 2025, the history growth might cease, providing more room for a gas limit increase. However, without EIP-4444, the history growth might be the next bottleneck in raising the gas limit. An analysis of the state growth by Storm Slivkov indicates, the history growth might be the next bottleneck in raising the gas limit. An analysis of the state growth by Storm Slivkov indicates that the state growth is also a potential bottleneck, but current rates, around 2.62 GB per month, are manageable, with modern

hardware sustaining growth for a decade. Memory requirements grow with state size, and a gas limit increased to 60M would accelerate this, potentially requiring 2 to 4.7GB of additional RAM per year. While a 64GB RAM setup provides a comfortable buffer for now, sustained growth could make upgrades more frequent. Upcoming improvements like vertical tries and state expiry are expected to ease this burden, but careful monitoring remains essential. What does a gas limit increase mean for MEV? Another factor that could affect decentralization is the impact of increased gas limits on MEV, maximum extractable value, earnings for validators. As MEV has grown in prominence, concerns have emerged about income disparity between

sophisticated validators using advanced MEV strategies and smaller solo stakers. This income gap could exacerbate centralization pressures, as validators with more resources and expertise dominate earnings. To address this, mechanisms like proposer-builder separation, PBS, and MEV burn are being actively discussed within the Ethereum community, which aim to equalize validator income. In theory, a gas limit increase allows more transactions to be included in a single block, potentially amplifying MEV-related income disparities. While MEV boost has partially mitigated this issue by enabling solo stakers to capture a share of MEV rewards, data on validator income disparity remains inconclusive. This is due to challenges in of MEV rewards, data on validator income disparity remains inconclusive. This is due to challenges in defining MEV transactions and accurately tracking earnings,

especially in complex scenarios such as cross-platform MEV strategies between centralized exchanges, CEX, and decentralized exchanges, DEX. However, these scenarios are relatively rare, as most MEV arises from top-of-block strategies. Moreover, a higher gas limit could enable more sophisticated and resource-intensive MEV strategies. While rare, there are instances of MEV bots executing highly complex transactions that consume almost the entire block gas limit. For example, a bot transaction utilizing over 18M gas was observed, performing multiple swaps and liquidity operations within a single block. As the gas limit increases, such strategies could become more prevalent,

potentially widening the gap between sophisticated validators and smaller participants. Conclusion The discussion around increasing Ethereum's gas limit presents an exciting opportunity to drive scalability, reduce transaction fees, and enable innovative dApps that were previously constrained by current limitations. While a higher gas limit can enhance scalability, lower transaction fees, and enable new types of dApps, it also raises important concerns about decentralization, validator requirements, and network stability. Issues such as state and history growth, execution time, and MEV disparities underscore the need for careful consideration and monitoring of empirical data. Ultimately, the success of a gas limit increase will depend on Ethereum's ability to balance these tradeoffs. Solutions like EIP-7623,

PBS, Proposer-Builder Separation, and MEV Burn demonstrate the network's proactive approach to addressing potential risks. With thoughtful implementation, a higher gas limit has the potential to unlock Ethereum's next phase of growth. A version of this article was originally published here. Thank you for listening to this Hackernoon story, read by Artificial Intelligence. Visit hackernoon.com to read, write, learn and publish.