Ethereum Raises Gas Limits After Three Years, Giving ETH a Potential Boost in Appeal.

Ethereum’s network saw a notable upgrade late Monday as validators approved a long-awaited increase in gas limits—the first since 2021 and the first in the post-Merge era—expanding the blockchain’s transaction capacity.

As of Tuesday morning, the gas limit stands at nearly 32 million units, with an upper threshold of 36 million. The last major adjustment in 2021 raised the limit from 15 million to 30 million. This increase was automatically enacted after receiving majority validator approval, eliminating the need for a hard fork.

Gas on Ethereum represents the computational cost of executing smart contracts and transactions. The gas limit defines the maximum amount of gas that can be consumed per block, determining network throughput. A higher limit allows for more transactions per block, reducing congestion and improving network efficiency.

This upgrade is expected to make Ethereum more competitive against lower-cost alternatives like Solana by minimizing peak-hour bottlenecks. The increased utility could also drive renewed investor interest in ETH, which has struggled against Bitcoin, recently hitting its lowest ETH/BTC ratio since March 2021.

Additionally, Ethereum’s upcoming Pectra upgrade aims to double layer-2 capacity by increasing the number of blobs per block from 3 to 6. These temporary data packets are crucial for layer-2 networks, enhancing scalability and transaction efficiency across the Ethereum ecosystem.