April 26, 2021: Have a Gas ⛽📉

Why Eth gas prices are dropping and how to celebrate.

What is going on with gas prices?!?

More importantly, what is going on with Ethereum gas prices?

We’ve not seen gas prices consistently below 40 gwei since December 2020. Of course, elevated gas prices have no deleterious effects on DeFi because whales don’t care about gas prices. While gas prices have been elevated, TVL in DeFi has jumped over 6x per DeFi Llama

What’s the cause of the discount? Anthony Sassano shares his thoughts in a piece this morning.

Anthony Sassano Ξ 🦇🔊 @sassal0x

A few reasons why gas is cheaper lately: - Gas limit (block size) was increased by 20% - Flashbots is allowing MEV extractors to bypass the mempool - Layer 2's (and other chains) are taking the load off layer 1 - Market is relatively quiet which naturally leads to less activity

Gas Limit Increased

alexkroeger.eth @alex_kroeger

Ethereum's block gas limit has been raised for the first time since July of last year, up from 12.5M per block to 15M duneanalytics.com/kroeger0x/gas-…

A week ago, miners voted to increase in block size. The timing syncs up, but if this causally affected gas prices it would be a bit of a surprise.

Anthony Sassano Ξ 🦇🔊 @sassal0x

Ethereum miners are voting up the gas limit (block size) with a target of 15mil (it's currently around 13mil). Once it gets to 15mil it will represent a 20% increase from 12.5mil (where it's sat at for a while). I don't expect this to have a major effect on gas prices.

It’s sort of like the Bitcoin block size debate without the ugliness.

Token State (TokΞnizΞ ThΞ World ΞIP-1559) @tokenstate

ETH gas limits raised 🙌 = lower fees 👀 This is the Bitcoin equivalent of raising blocksize which never happened. Ethereum is once again firing on all cylinders. 👍 L2s going live, 1559 🔥 July, POS merge EOY.

The larger gas limit would give miners a bit more throughput, boosting profits in the short term until they potentially get rekt by 1559.

Sisyphus @0xSisyphus

Gas limit increase is nice but does feel like miners trying to get every last drop out of ETH before EIP-1559 Anyone know if there was a specific reason for the change?

MEV via Flashbots

The concept of Flashbots reducing gas prices is also interesting and a credible explanation. Per their recent transparency report, 12 mining pools accounting for 58% of the Ethereum hashrate are now mining through Flashbots, bringing the gas wars off chain.

MEV (Maximum Extractable Value, or sometimes Miner Extractable Value), are simply optimization techniques to redistribute transactions in blocks to extract additional value. When this happens on-chain, there’s incentive to game these auctions with gas wars or network spam.

There.Is.No.Alternative ⚡🤖 @tzhen

4/ MEV Auction Design by @suryabakshi (h/t @valardragon @no89thkey ) - Why MEV auction? - Desirable properties of an optimal mempool auction? - Solution: a sealed-bid auction? Slides: tinyurl.com/5jcfx24 Video: tinyurl.com/57kjwn2n (Timestamp: 01:02:25)

Once it moves off-chain, the burden is somewhat relieved. For a bit more background on MEV we recommend this article:

Etherscan.io @etherscan

For a quick intro into MEV and its rapid rise, have a read of our recent article on the topic:

medium.comRapid Rise of MEV in EthereumData for this article was taken from Etherscan & Flashbots between blocks 11834049 and 12196601 on Ethereum. Maximal Extractable Value (MEV — previously, Miner Extractable Value) has cast a…

The Great Chain Wars

Other theories posit that gas is cheap because people have fled Eth for cheaper chains.

Hasu @hasufl

1) Gas limit now 15m gas (up from 12.5m) 2) Many farmers have migrated to greener pastures (BSC, Solana, Terra) 3) More efficient MEV extraction leading to fewer failed txns

maverick_surfer @maverick_surfer

@hasufl Gas costs are low? What changed ?

Indeed, Curve’s Polygon launch has already rocketed past $100MM TVL.

Curve Finance @CurveFinance

Pool on @0xPolygon [polygon.curve.fi] just crossed 100M TVL

Yet while other chains are indeed growing rapidly, it’s actually coinciding with an uptick in Ethereum active addresses.

Andrew Køng @Rewkang

Ethereum vs Binance Smart Chain Active Addresses

Celebrating Cheap Gas

Whatever the reason, the noble ape doesn’t care why gas is low.

Adam Barlam @adambarlam

Loving these cheap gas fees! Thank you @ethereum devs and @VitalikButerin for raising the gas limit to 15M! Making #ETH extremely affordable again! Can't wait for the London hard fork!

The question is simply what to do with so much cheap gas.

The Crypto Monk ⛩️ @thecryptomonk

ETH fees are so low, I don’t know what to do with the extra money i can save now.

Wangarian @Wangarian1

It's time for a lil spring cleaning

So what are you doing with cheap gas?

Chaz Schmidt 🦇🔊 chazschmidt.eth @ChazSchmidt

Gas is cheap right now meaning it is a good time to set old token approvals to 0. A few $ worth of gas today could save you from getting rugged in the future.

revoke.cashRevoke.cashProtect your ERC20 token balances by revoking access to the apps you used in the past.

Anthony Sassano Ξ 🦇🔊 @sassal0x

Some things to do while gas is cheap ⛽️ - Onboard to layer 2's - Provide liquidity on an AMM - Harvest yield farming crops - Sell some "dead weight" tokens for $ETH - Register an @ensdomains name - Anonymize some ETH with Tornado Cash

For our sake, here’s a live webcam of what we’re doing with cheap gas:

Share how you’re taking advantage of the situation in the comments.

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