The Future of Web3 Needs Zero Gas Fees

First-generation blockchain networks relied heavily on network fees to provide security and incentivize adoption. However, a decade of massive user adoption makes it evident that the future of Web3 will be “gasless.” 

The current Web3 business models of metaverse gaming, NFT collectibles and creator-first content platforms will struggle to scale to billions of users if they require users to pay fees for each transaction. In sharp contrast, a zero gas fee model delivers a frictionless experience to Web3 users and is already a reality for blockchain developers and users on the SKALE Network. 

Before diving deeper into the concept of zero gas fees, this piece will clear common misconceptions surrounding the recent Ethereum Merge. The landmark event is the first step in a long list of Ethereum scaling upgrades that will drive fees toward zero on the execution layer. 

Misconceptions about Ethereum’s scaling upgrades 

1. The Merge will reduce Ethereum gas fees

According to Ethereum founder Vitalik Buterin, the roadmap to low gas fees on Ethereum comes in five different phases: The Merge, The Surge, The Verge, The Purge and The Splurge. The Merge does not have any notable impact on Ethereum’s network performance. Instead, it lays the foundation for implementing several scalability and performance-focused upgrades. 

The Surge, the next in line in a post-Merge era, will reduce Ethereum network congestion and lower gas fees. The Surge will see the introduction of sharding — a scalability approach that splits the Ethereum network into smaller interconnected chains that offer higher throughput and low block times. 

The Surge will also support the creation of rollups — layer-2 solutions that process transactions on their native chains before settling them on the more secure Ethereum network. While the move to proof-of-stake is an important milestone, it is not until developers implement The Surge sometime between 2023-2024 that Ethereum can theoretically offer lower gas fees and process more transactions per second.

2. The Surge will eliminate the need for layer-2 solutions

The Surge will make layer-2 solutions more robust rather than eliminate them. Current layer-2 solutions, including rollups, are limited by the burden of handling large amounts of data. A sharded network shares the data handling load and allows rollups to scale up to 100,000 transactions per second.

A typical roll-up solution bundles several transactions executed on its native chain into one, which is submitted on the Ethereum mainnet. This “bundling” process reduces the amount of data required to process the transaction on Ethereum and frees up more blockspace.

Layer-2 solutions will see greater adoption as Ethereum moves from the monolithic blockchain model to a modular one. These solutions on different chains will offer cheap and fast transactions that derive their security from Ethereum’s main layer. However, the long-term roadmap indicates that rollups alone are not enough to scale throughput on Ethereum. 

3. Rollups are the only L2 solution needed to scale

Although rollups are an integral piece of the scaling solution puzzle, they are only ideal for transactions and applications that require limited computational power. They cannot simultaneously power several Web3 applications handling millions of transactions per minute.

In a theoretical scenario, rollups can only allow developers to bundle transactions that initially cost $1,000 in fees to as low as $200. Yet, even such significant cost savings amount to millions for a platform that plans to scale to the millions of users served by most Web2 apps.

The optimum approach to scaling the Web3 economy is a zero gas fee environment where users do not pay a fractional fee for every transaction. Achieving such scale using highly interoperable blockchains takes Web3 to the cusp of mainstream adoption. 

SKALE’s modular approach to scaling 

SKALE is pioneering a new modular approach to scaling Ethereum. Current L2 solutions, including rollups, utilize a monolithic system where developers must build applications on a single network, inheriting the same flaw of the native Ethereum network.

SKALE truly scales through interconnected blockchains called SKALE Chains, created and managed by independent dapp developers to suit their specific needs. Running a dedicated chain for different use cases and applications enables infinite scalability. It also allows for reliable interoperability between all SKALE Chains, reducing the friction associated with bridging assets between other networks.

Another of SKALE’s unique propositions is that it imports security from Ethereum using an elaborate consensus mechanism. SKALE validator nodes stake assets on the Ethereum mainnet, while interconnected SKALE Chains enjoy decentralization through a robust validator rotation mechanism. 

How zero fees works with SKALE

What makes SKALE unique from all other scaling solutions is its ability to deliver zero gas fees. They adopted a model that is similar to how Web2 products subsidize hosting costs on behalf of users. Jack O’Holleran, co-founder of SKALE Labs, broke this down for us:

“SKALE, like all blockchains, has an integrated onchain payment method which pays validators to validate blocks and secure the network. Most blockchains make end users pay validators via transaction/gas fees which introduces friction and inhibits growth. SKALE, in contrast, enables the applications to pay validators directly in advance which subsidizes the gas fees for users.”

This subscription model allows the ecosystem to grow sustainably through attracting projects with viable business models and real world applications.

A Web3 with zero gas fees

A Web3 experience with zero gas fees has an infinite scale similar to current Web2 applications. For instance, a Web3 play-to-earn game charging fees per transaction cannot scale to the size of the popular gaming title PUBG, which has over a billion players. The same limitation applies to on-chain dexes that support limit order books and must handle hundreds of thousands of transactions per second to enable a frictionless experience.

Blockchain development teams are tapping SKALE Network to build dapps immune to the limitations of network fees. For instance, Ruby Exchange is a SKALE-based decentralized exchange that enables users to boost yield and reduce fees through holding NFTs. Another team plans to launch SKALE’s first NFT marketplace called NFTrade. It will be hosted on the NFT community hub chain Calypso and its estimated release date is sometime in Q4. Additionally, the development team behind Exorde created a Web3 protocol that empowers developers to crawl and link all public data on the web. 

With a total of 20 SKALE chains and over 10 million transactions, users have saved 32,351 ether in gas fees to date. As of publication, that equates to $53,074,446 in savings. SKALE’s high performance and gasless experience continues to attract more Web3 gaming projects such as Block Brawlers, Crypto Colosseum and CryptoBlades into its ecosystem. 

The future Web3 economy will require blockchain networks that offer frictionless experiences. In such an economy, users can freely roam applications without paying a fractional fee for each transaction.

Developers can deploy applications confident that the underlying network is robust enough to support infinite scalability. SKALE is built to deliver such a fluid network performance and will almost certainly gain further traction as the journey to scaling Ethereum enters its next phase.

This content is sponsored by SKALE.

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