The Ethereum network’s transaction capacity was expanded late Monday after validators voted to raise the gas limit for the first time since late 2021, marking the first adjustment since the network’s Merge transition.
The gas limit reached nearly 32 million gas units as of Tuesday morning, with a maximum expected capacity of 36 million units. The previous significant increase was in 2021 when the gas limit moved from 15 million to 30 million gas units. This change was triggered automatically after more than half of Ethereum’s validators supported it, eliminating the need for a hard fork (a network split).
Gas on Ethereum is a unit that measures the computational work required to execute operations such as transactions or smart contracts. Every operation has a specific gas cost, and users are charged accordingly for the computational effort needed to complete their actions. The gas limit sets the maximum gas usage per block, and any transactions that exceed the limit are either delayed until the next block or compete for inclusion based on the gas price offered.
By raising the gas limit, Ethereum can now process more transactions and execute more complex operations within each block. This enhances the network’s throughput, enabling the creation of more advanced decentralized financial (DeFi) applications while minimizing network downtime. It also reduces congestion during peak times, making the network less expensive to use, and potentially preventing users from turning to cheaper alternatives like Solana.
This improvement could bolster investor demand for ETH, helping to stabilize the world’s second-largest cryptocurrency, which has seen waning interest over the past year. In fact, Ethereum’s value recently fell to its lowest level against bitcoin (BTC) since March 2021, with one ether trading at just 0.03 BTC in January — nearly 50% lower than the previous year as bitcoin surged ahead.
In addition, the upcoming Pectra upgrade is poised to increase the capacity of Ethereum’s layer-2 networks — blockchains built on top of Ethereum — by doubling the “blob” target from 3 to 6. Blobs are large data packets that layer-2 networks use to store data for a set time. As of Tuesday, each Ethereum block contains 3 blobs, but the upcoming upgrade will significantly boost this figure.
