How to fix the Eth gas Price problem NOW!

How to fix the Eth gas Price problem NOW!


Ethereum is the chain of choice for most of the smart contracts that are fueling todays Defi revolution. But success has come at a price, the increased transaction volume has placed considerable strain on the network forcing gas prices up to historical highs. If this issue is not addressed transferring ERC-20 tokens will be too expensive for many users.

A reorganization of the Ethereum network, called Eth 2.0, offers an elegant solution to that problem. But it is a solution that will take some time before it can be fully implemented due to the complexity of changes to be applied to the  operating network.

There is another way of avoiding the transaction fees and network capacity bottlenecks. That is by running parallel networks on top of the existing network. These subnets would take care of some transactions internally, reducing the load placed on the main net. These are called Layer-2 solutions, and are nothing new in the world of blockchains.

When the bitcoin network encountered scalability issues the first off-chain (layer-2) solution was suggested. The lightning network that was implemented now boasts over 2,000 nodes, handling transactions without bugging down the main bitcoin network. Because of the implementation of Seg-wit on the bitcoin mainnet it was possible to increase the network capacity and remain viable when confronted with higher transaction volumes.

And now that the Ethereum mainnet is facing similar problems layer-2 solutions also appear to offer much needed relief. 

Demo success!

Last Friday it was announced that the layer-2 Ethereum network solution being developed by Optimism was releasing a limited testnet of its network. This is big news because, if successful, Optimism could become a gas-free zone where you could transact on different dapps in a quick and frictionless manner.

The first dapp to join this initial testnet is the decentralized exchange Synthetix. It must be noted that we’re talking about a testnet, meaning that there is still some tweaking going on to ensure the security and functionality of the network. That’s why Synthetix is offering incentives in the form of SNX tokens to users to test Optimism’s network.

It is said that other projects are lining up to join Optimism’s network. Lured by the promise of reduced transaction costs both Chainlink and Uniswap have shown interest in this layer-2 network solution to ETH high gas fees.

Layer-2 solutions are not new, there are issues of trust and reliability that must be resolved. We can only hope that as this and other layer-2 networks start popping up in the eth landscape all users will benefit as the transaction load and cost is reduced.


ManuelAR
ManuelAR

Male, Electrical Engineer, from Panama


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