Setting Expectations - The Daily Gwei #415
There is an unfortunate narrative that has been going around over the last few months that claims that The Merge will reduce gas fees on Ethereum layer 1. I want to make this very clear - The Merge will not have any material impact on layer 1 gas fees - the only tiny impact it may have on fees is that blocks are slightly faster (12 seconds instead of 12.9 seconds) but I doubt this has any real impact and I doubt that the user even feels it. The Ethereum merge will take place some time around June '22, but it won't have an impact on the transaction fees you're paying. After the merge the focus will likely shift to fees, but you can be proactive now by using tools like Polygon, xdai, Arbiturm, Optimism, and zksync. I’m actually quite worried about just how bad the fallout is going to be once The Merge happens and gas fees aren’t lowered as many people are expecting them to be. I can already imagine the amount of FUD (fear, uncertainty and doubt) that will be spread as a way to paint “eth2” as a failure even though The Merge will be the biggest upgrade in Ethereum’s history. This is a major reason why I’ve been trying to educate as many people as I can about the layer 2 ecosystem and the modular blockchain paradigm and how some of this is ready today for users to enjoy cheap transactions on. Of course, regular Daily Gwei readers will know what I’m talking about above, but a quick refresher for newer readers: the way Ethereum is scaling is via a modular approach where layer 1 remains expensive to use (so it can remain decentralized and secure) and acts as a settlement layer for layer 2 where it’s cheap for users to transact on (and gets cheaper over time). Though in saying that, the Ethereum scaling roadmap is complex and if you’re a newer person to the ecosystem it can be quit difficult to follow along with it. So, given this context, it’s no surprise that people have clung onto the simple narrative of “eth2 will fix gas fees” and it also doesn’t help that many people with an audience keep perpetuating this narrative. The thing is, the Ethereum fee market is a function of demand for limited blockspace and that demand is obviously through the roof. This leads to the very high gas prices that we all experience at layer 1 and the only time these prices go down is when network activity goes down. But there is so much to do on Ethereum that fees remain high even when the market is quiet - just look at how much gas the NFT ecosystem uses which has proven to be mostly detached from the broader crypto markets in terms of performance and activity. Though again, this is a nuanced topic and not something I expect newcomers to grasp immediately. I’m obviously very much looking to The Merge for reasons I’ve outlined in the past but I’m also looking forward to it to see if I’m right about this narrative leading to a really bad outcome. Obviously I hope I’m wrong but I’ll keep educating about this issue as if I’m right because more people should be made aware of how Ethereum is scaling regardless of anything else. So, if you want to help me on this education quest, whenever someone asks you if The Merge will lower gas prices, just say no. Have a great day everyone, Enjoyed today’s piece? I send out a fresh one every week day - be sure to subscribe to receive it in your inbox! Join the Daily Gwei EcosystemAll information presented above is for educational purposes only and should not be taken as investment advice. If you liked this post from The Daily Gwei, why not share it? |
Older messages
Can Devs Do Something? - The Daily Gwei
Thursday, January 13, 2022
Sorry folks, going to have to rug you with today's newsletter.
Sticking Around - The Daily Gwei #414
Tuesday, January 11, 2022
Crypto can change your life but only if you let it.
Optimising Fees - The Daily Gwei #413
Monday, January 10, 2022
Fees for thee and also for me.
Proof of Revenue - The Daily Gwei #412
Friday, January 7, 2022
Making money 1 degen at a time.
Degen vs Boomer Mindset - The Daily Gwei #411
Thursday, January 6, 2022
Don't lose that degen spirit, kids.
You Might Also Like
OP's Superchain Vision | Layer 2 Review
Friday, April 26, 2024
Quick Reads and Hot Links Covering the People and Projects Who Are Scaling Ethereum ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Investor exodus from Bitcoin ETFs as BlackRock and Fidelity see significant outflows
Friday, April 26, 2024
BlackRock see back-to-back zero flows as Fidelity's FBTC records first outflow. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Raise your onchain score
Friday, April 26, 2024
New Quests just dropped. Claim APT while you increase your chain score and build your reputation, helping with potential airdrop eligibility Flipside Crypto Hey there, A new Aptos Quest dropped. Claim
NFT & Blockchain Gaming Weekly - 📈 Runes Dominated BTC Transactions Post-Halving
Friday, April 26, 2024
Runes Dominated BTC Transactions Post-Halving. Telegram to tokenise stickers & emojis as NFTs. ApeCoin price drops 66% amid BAYC decline. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
WuBlockchain Weekly: SEC Expected to Reject Ethereum Spot ETF, ConsenSys Sues SEC, CZ trial is approaching and Top…
Friday, April 26, 2024
1. BlackRock's Bitcoin Spot ETF Achieves 70 Consecutive Days of Net Inflows link BlackRock is very pleased with the performance of its Bitcoin spot ETF (IBIT). Since its launch in January of this
Your bi-weekly crypto insights 📊
Thursday, April 25, 2024
Top data-driven insights from across the crypto space, to keep you ahead of trends. This week's top insight: Sei TVL per active address grew 10x since Flipside Crypto Onchain Insider Your bi-weekly
BlackRock’s historic 71-day streak ends as IBIT Bitcoin ETF sees zero inflows
Thursday, April 25, 2024
Fidelity and Ark only ETFs to record inflows as Bitcoin ETFs begin to cool off. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Your Last Chance to Make BANK on Crypto
Thursday, April 25, 2024
Open This or Miss Out
Inside Parcl: Trade Real Estate Like Never Before?
Thursday, April 25, 2024
Parcl, a pioneering Solana-based platform, aims to revolutionize the real estate market by introducing liquidity to this traditionally illiquid asset class. It created a comprehensive real estate index
Reminder: The 2024 Bitcoin Halving Has Successfully Been Completed
Thursday, April 25, 2024
We bring you the top stories in crypto every week! Stories like... Monday April 22, 2024 Sign Up Your Weekly Update On All Things Crypto TL;DR The 2024 Bitcoin Halving Has Successfully Been Completed