Ethereum Gas Limit and Strategies to Set Optimal Gas Price

Ethereum has become one of the most popular blockchain networks for decentralized applications (dApps) and smart contracts. However, interacting with the Ethereum blockchain can sometimes be frustrating due to the complexities around "gas" fees. When making a transaction on Ethereum, you need to specify a gas limit and gas price - but what do these mean and how can you optimize them to save on fees?

What is Gas on Ethereum?

"Gas" refers to the fee required to successfully conduct a transaction or execute a contract on the Ethereum blockchain. Just like you need to pay for gas to fuel your car, you need to pay for gas on Ethereum to run computations and storage. Gas serves two main purposes:

• It prevents infinite loops and other computational wastage on the network. Each transaction requires a fee, so this discourages frivolous transactions.
• It incentivizes miners to process and validate transactions and maintain the blockchain. Miners get paid the gas fee for their work.

Gas is priced in small fractions of the cryptocurrency Ether (ETH) - usually in Gwei, which is 1/1000000000 of an ETH. You can think of Gwei as the "litres" of gas for your transaction. The gas limit is how much gas/litres your car's tank can hold. And the gas price is how much you pay per litre. Multiplying the gas price (in Gwei) by gas limit gives the maximum total fee for your transaction in ETH.

The Role of Gas Limit

The gas limit sets the maximum amount of gas/fuel you're willing to spend on a transaction. This prevents your transaction from consuming unexpectedly high amounts of gas due to infinite loops or other complex execution paths.

The gas limit is like putting a cap on your spending. Even if the transaction ends up requiring more computations and exceeding the gas limit - it will simply fail/revert but you won't be charged for more than the gas limit you set.

The downside is that if you set too low a gas limit, your transaction may fail because it runs out of gas before completing execution. So you want to set a sufficiently high enough limit.

Each type of operation on Ethereum has a predefined gas cost based on its complexity. For example, a simple ETH transfer costs 21,000 units of gas whereas more complex smart contract functions can cost over 100,000 gas.

So when setting the gas limit, you want to have a rough estimate of how complex/expensive your transaction steps are so you can cater for the maximum gas needed. You can refer to gas price guides to understand the costs of different operations.

How to Set the Right Gas Price

The gas price determines how much you pay per unit of gas. This is denominated in Gwei (1/1000000000 ETH).

At times of high network congestion, users compete to get their transactions processed faster by raising the gas price they are willing to pay. Miners naturally prioritize transactions with higher gas prices.

The standard gas price changes dynamically based on market conditions and demand for block space. You want to set a gas price that ensures timely confirmation but avoids overpaying.

Here are some tips for setting optimal gas price:

• Check Ethereum gas price trackers for the current "standard" gas price based on average network activity.
• During high demand, you may need to set a gas price above the standard to get processed faster.
• For non-urgent transactions, you can set a lower gas price (with longer confirmation times) to save on fees.
• Use the ETH Gas Station or GasNow price guides to estimate the gas price needed for different target confirmation times.
• If your transaction fails due to "Out of Gas" errors, gradually increase the gas limit and retry.
• For critical transactions, set higher gas prices and use the max fee option in your wallet. This guarantees the transaction is mined quickly.
• If your wallet supports it, set gas price strategies like "medium", "fast", or "rapid" to auto-adjust to network conditions.

Optimizing Gas Limit

Here are some tips for setting the optimum gas limit to avoid failed transactions or overspending on gas:

• For simple transactions like ETH/token transfers, 21,000 gas limit is usually enough. For token swaps, set 50,000-100,000 gas limit.
• For interacting with exchanges, 100,000-250,000 gas limit is usually adequate.
• Claiming airdrops may take up to 200,000 gas.
• For complex smart contract transactions, an estimate of 100,000-300,000 gas limit should cover most cases.
• As a rule of thumb, set the gas limit to 1.5-2 times the estimated gas usage for the transaction. This provides a buffer for price fluctuations.
• After failed transactions, check the gas used and slowly increase gas limit in increments of 25,000-50,000 and resend.
• Where possible, test complex transactions on testnets first to profile the gas usage before mainnet.

By following these gas limit and price strategies, you can optimize Ethereum transactions while avoiding common pitfalls like running out of gas or overpaying on fees. As the network evolves, estimating gas requirements will get easier for end users.

What is the Future of Gas on Ethereum?

"I've been using Ethereum for years but setting gas limits and prices continues to be a headache. This friction risks limiting mainstream adoption - we need better solutions!"

Ethereum developers recognize that gas complexity is a barrier to mass adoption. Exciting improvements are in progress to create smoother experiences:

• EIP-1559 introduced more predictable base fees and burnt excess gas to lower volatility.
• L2 solutions like Optimism and Arbitrum allow you to minimize gas costs by transacting outside Layer 1.
• Planned upgrades like Proto-danksharding and EVM Object Format will optimize gas pricing dynamically.
• Better wallets, APIs and tools are coming so users don't have to manually input gas limits and prices.
• Longer term, Proof of Stake aims to reduce fee volatility compared to PoW models.

So while gas fees remain frustrating today, take comfort that the brightest minds are innovating solutions to unlock Ethereum for global audiences. The future promises simpler, cheaper access so more people worldwide can build on and benefit from decentralized applications.

How Can We Make Blockchain Transactions More Accessible?

Despite innovations, blockchain transactions require technical knowledge beyond most users' capabilities. Solutions like gas abstraction hide complexity but don't fully address costs. How might we reimagine transactions to be truly accessible for anyone, anywhere?

Some possibilities:

• Fiat on-ramps and off-ramps integrated into applications could allow usage without owning .
• Usage-based pricing models where users pay for value received rather than underlying computation.
• Decentralized identity and reputation systems to underwrite transactions for those lacking funds.
• Stablecoins with low volatility to enable everyday purchases.
• Low-cost, real-time transactions enabled by innovations like zero-knowledge proofs and sharding.

The vision of an open, permissionless financial system will only be realized if designed for the next billion users. By starting from principles of universal access, we can build the interfaces, currencies, and networks that unlock blockchain for the world.