Ethereum, the world’s second-largest cryptocurrency by market capitalization, has been experiencing a significant increase in gas fees. The reason behind this surge has been a mystery to many until recently, when a Twitter user named Cygaar [@0xCygaar] shed some light on the issue. Let’s take a look at this Ethereum Gas fee article in more detail.
The Top ETH Gas Guzzler
According to Cygaar, the primary culprit behind the high gas fees is a specific contract where users are making validators run useless or unnecessary code. This action, in turn, increases the overall gas usage on the Ethereum network. The contract in question has been identified as the top ETH gas guzzler, contributing significantly to the high transaction fees.
An Introduction to Ethereum Gas Fees
Ethereum gas fees are the costs required to perform any operation on the Ethereum network. These operations can range from simple transactions, like sending Ether (ETH) from one address to another, to more complex interactions with smart contracts.
The concept of gas in Ethereum is similar to the fuel in your car. Just like you need fuel to drive your car a certain distance, you need gas to perform operations on the Ethereum network. The more complex the operation, the more gas it requires.
The gas fee is determined by two factors: the amount of gas required for the operation (Gas Used) and the price you’re willing to pay per unit of gas (Gas Price).
Let’s consider a simple example to illustrate this:
Suppose you want to send some ETH to a friend. This is a simple operation and let’s say it requires 21,000 units of gas (this is the actual amount of gas required for a standard ETH transfer).
Now, you need to set a gas price, which is the amount of ETH you’re willing to pay for each unit of gas. The gas price is usually set in ‘gwei’, where 1 ETH = 1,000,000,000 gwei. Let’s say you set a gas price of 20 gwei.
The total gas fee for your transaction would be calculated as follows:
Total Gas Fee = Gas Used x Gas Price
So in this case, the total gas fee would be:
Total Gas Fee = 21,000 (Gas Used) x 20 (Gas Price) = 420,000 gwei or 0.00042 ETH
This is the amount you would pay to send ETH to your friend. Note that if the Ethereum network is busy, you might need to set a higher gas price to get your transaction processed quickly. Conversely, if the network is not very busy, you might be able to get away with a lower gas price.
Understanding Gas Fees Calculation in Ethereum
The high gas fees have a direct impact on the users of the Ethereum network. People are essentially burning their money to increase gas fees for everyone else. This situation is not only detrimental to individual users but also to the overall health and sustainability of the Ethereum network.
In Ethereum, the cost of a transaction (the “gas fee”) is determined by two factors: the amount of computational work that needs to be done (the “gas used”) and the price per unit of gas (the “gas price”).
- Gas Used: Every operation that occurs in the Ethereum network, from simple transfers to complex smart contract interactions, requires a certain amount of computational work. This work is measured in “gas.” For example, a simple ETH transfer requires 21,000 units of gas.
- Gas Price: The gas price is the amount of ETH that the transaction sender is willing to pay for each unit of gas. It’s usually measured in “gwei,” where 1 ETH = 1,000,000,000 (one billion) gwei. The gas price is set by the sender but ultimately determined by supply and demand in the network. If the network is busy, you might need to pay a higher gas price to incentivize miners to include your transaction in the next block.
The total gas fee is calculated as follows:
Total Gas Fee = Gas Used x Gas Price
The Impact of Unnecessary Code Execution
Now, let’s consider a smart contract that includes unnecessary code. For simplicity, let’s say this unnecessary code doubles the computational work required for the contract execution, increasing the gas used from 21,000 to 42,000 units.
If we assume a gas price of 100 gwei, the gas fee for a normal transaction would be:
Normal Gas Fee = 21,000 (Gas Used) x 100 (Gas Price) = 2,100,000 gwei or 0.0021 ETH
However, with the unnecessary code, the gas fee would be:
Increased Gas Fee = 42,000 (Gas Used) x 100 (Gas Price) = 4,200,000 gwei or 0.0042 ETH
As you can see, the inclusion of unnecessary code in the contract has effectively doubled the gas fee. This is a simplified example, but it illustrates how inefficient code can lead to higher transaction costs on the Ethereum network. In reality, the impact could be even more significant, especially during periods of high network congestion.
The execution of unnecessary code by validators not only increases the gas usage but also puts an additional load on the Ethereum network. This unnecessary load leads to congestion, slowing down transaction processing times and causing a spike in gas fees.
The Economics of Ethereum Gas Fees and the Role of Unnecessary Code
In the Ethereum network, every operation that takes place, from simple transactions to complex smart contract interactions, requires computational resources. These resources are not unlimited and are provided by nodes or validators in the network. The cost for these resources is paid in “gas,” and the price of gas is determined by supply and demand dynamics. When a specific contract makes validators run useless or unnecessary code, it artificially inflates the demand for computational resources.
This unnecessary demand puts a strain on the network, causing congestion. As more and more resources are requested, the available supply decreases, leading to an increase in gas prices. This is similar to traffic congestion on a highway; the more cars (or in this case, transactions) there are, the slower the traffic moves, and the longer it takes to reach the destination. In the context of Ethereum, this means that users have to pay higher fees to get their transactions processed faster. Therefore, by making validators execute unnecessary code, users are effectively driving up the demand and, consequently, the price of gas, leading to higher transaction fees for everyone on the network.
The Call for a Solution
The revelation by Cygaar has sparked a conversation about the need for a solution to this problem. It’s clear that the Ethereum network needs to find a way to prevent the execution of unnecessary code to maintain its efficiency and keep gas fees at a reasonable level. The community is now looking towards Ethereum’s developers for a solution that can address this issue and ensure the network’s long-term sustainability.
So, the high gas fees on the Ethereum network are a pressing issue that needs immediate attention. The revelation by Cygaar has shed light on a significant contributing factor, and it’s now up to the Ethereum community to find a solution.
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Source: https://cryptoticker.io/en/rising-ethereum-gas-fees/