Ethereum Boosts Gas Limits for the First Time Since 2021, Making ETH More Appealing.

Late Monday, Ethereum’s network took a significant step forward in its capacity to process more transactions as validators approved the first increase in gas limits since the network’s transition to Proof-of-Stake in 2021.

The gas limit now stands at nearly 32 million units, with the potential to reach up to 36 million. This follows the last major adjustment in 2021, which raised the gas limit from 15 million to 30 million units. The decision to implement this increase was made automatically after over half of the network’s validators voted in favor, avoiding the need for a hard fork.

On Ethereum, gas refers to the unit of computational effort required to carry out tasks such as executing smart contracts or processing transactions. Users pay for the gas based on how much computational work their actions demand, and the gas limit determines how much total gas can be used within a single block. If this limit is exceeded, transactions are either delayed or forced to compete for inclusion depending on the price users are willing to pay.

By raising the gas limit, Ethereum is able to process more transactions and execute more complex smart contracts within each block. This increase in throughput reduces congestion during peak usage times, which can otherwise drive users to cheaper alternative networks like Solana.

The gas limit hike is seen as a way to boost Ethereum’s overall utility, which may also increase demand for ETH. Despite the network’s improvements, Ether’s value has been struggling against Bitcoin in recent months, hitting its lowest point against BTC since March 2021.

The upcoming Pectra upgrade, expected to double the capacity of Ethereum’s layer-2 networks, will further enhance scalability by increasing the blob target from 3 to 6. Blobs are large data packets used by layer-2 solutions to store data for a set period, and the upgrade promises to optimize this process and improve efficiency.