Ethereum has raised its block gas limit from 30 million to 32 million units its first adjustment in three years and the first major change since shifting to proof-of-stake. Approved by just over half the validators, the update aims to boost the networkās capacity to process transactions per block, potentially easing congestion and reducing fees during peak times. Gas, which represents the computational effort required for processing transactions and smart contracts, now accommodates more operations per block. This move follows a similar 2021 adjustment that doubled the limit from 15 million to 30 million units. While the increased gas limit is anticipated to lower fees during high traffic periods, it also raises the operational costs for validators, who may need to invest in more robust hardware to handle the larger blocks and maintain network decentralization.
Alongside these changes, co-founder Vitalik Buterin outlined future scalability improvements, including the Pectra upgrade slated for March 2025. This upgrade will raise the blob target for Layerā2 networks from 3 to 6, effectively doubling sidechain capacity and boosting transaction throughput amid growing competition and higher volumes. Buterin's announcement not only signals confidence in Ethereum's future scalability but also addresses the growing demand from developers for improved Layerā2 solutions.
Ethereumās token dynamics have also shifted. The total ETH supply has returned to preāMerge levels at about 120.5 million its highest since January 2023 and slightly above Mergeāday figures. Analysts link this rise partly to the Dencun upgrade, which modified the gas feeāburning mechanism to better manage Layerā2 data loads. After a period of declining supply following the Merge, adjustments introduced in March 2024 reversed the trend, marking a shift in the networkās inflationary dynamics. This change has sparked discussions among analysts about the longāterm economic implications for ETH, as increased supply may impact future valuation models.
Nonātechnical developments have also emerged. Internal debates within the Ethereum Foundation hit the headlines when a proposal to replace executive director Aya Miyaguchi with former researcher Danny Ryan was dismissed by Buterin. The decision prompted the departure of key figures, including core developer Eric Conner, highlighting ongoing leadership tensions.
Market reactions have been mixed. Although the higher gas limit may improve transaction speeds and lower fees, Ethereum still lags behind Bitcoin. The ETH/BTC ratio dropped to 0.03 in January 2025 its lowest since 2021 and trader Peter Brandt noted that even a shortāterm rebound in Ethereum's price would not change Bitcoinās longāterm investment appeal. Investors are watching these shifts closely, as market sentiment fluctuates with both technical upgrades and broader crypto trends.
Currently, Ethereum trades around $2,828āa modest 1.6% increase in 24 hours, but a 12.8% decline over the past week. As Ethereum implements these upgrades and faces internal governance challenges, investors and developers will closely watch its scalability, token supply dynamics, and market competitiveness. This comprehensive approach reflects Ethereumās ongoing efforts to balance technical innovation with network security and decentralization.
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