Scaling Ethereum
At the moment of writing the Ether Price is jumping to an all-time high price near $2,100.
This is great news for investors and holders but probably not much for developers and frequent users which needs a lots of transactions in shorts periods of time.
The DeFi explosion together with the NFT fever has put Ethereum network against the ropes. High traffic, network congestion and expensive transactions, can ruin the experience for users trying to transfer small amounts or developers trying to deploy smart contracts.
In April 6, 2020 the average gas price was 10.6 Gwei per transaction, one year later the gas price is 148 Gwei in average. This is an increment of almost 14X in one year.
A simple transfer of Ether can cost between $8 and $10, deployment of a simple contract can cost more than $300 just in gas fees.
Ethereum challenges
Proof of Stake
Vitalik Buterin promised in March 2021 an scalation of 100X in Ethereum in a matter of weeks, this statement is based on the migration to Eth2 which is already live, but sharding feature is still not available.
Sharding is based on the idea of “divide and conquer”, meaning that splitting the network into multiple fragments or shards can optimize the resources of the network facilitating the path to the desired escalation solution.
Berlin Hardfork
On April 14, at block 12,244,000 the main Ethereum network will apply a Hardfork named Berlin. This will include a number of improvements like:
- EIP-2565: Defines the gas cost of the
ModExpprecompile. - EIP-2929, a proposal to increase Gas cost for state access opcodes. This is a measure to reduce attacks, but not really to reduce gas fees. On the contrary it can increase them.
- EIP-2718, Defines a new transaction type that is an envelope for future transaction types, and:
- EIP-2930, which includes a transaction type with optional access lists. Which again is needed for security reasons, but it will not reduce gas fees.
In brief, all these improvements are an important part of the evolution of the network but may not have a strong impact on the network fees.
EIP-1559 Proposal
The EIP-1559 proposal, which defines as:
“A transaction pricing mechanism that includes fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion.”
Can definitely has an positive impact in the reduction of gas fees. In fact some pools has expressed concerns about this proposal and even threatening to commit a 51% Network Attack, because the auction scheme for transaction cost will be eliminated in the sense that miners can no longer choose which transaction process based on the price that the user is willing to spend.
But this proposal was not included in the Berlin hardfork, it will be included in the London hard fork expected for this July, 2021.
Will be that enough to reduce the crazy gas fees? will the pools accept this fees reduction? time will tell.
A world beyond Ethereum
While the Ethereum community tries to clean the house there are a few alternatives to interact and deploy smart contracts in environments that are EVM compatible, meaning that users can interact with other blockchains or Layer 2 solutions from the comfort of Metamask, just like they do with Ethereum, but without the expensive fees.
Some of this well-known solutions are:
- Binance Smart Chain: an EVM compatible blockchain by Binance.
- xDai Chain: a Layer 2 solution based on xDAI coin, which has fees in a stable coin pegged to the USD.
- Polygon Network (Matic): an adapted version of Plasma with PoS based side chains.
In the next chapter we are going to show how to use WPSmartContracts to deply and interact with these blockchains.
