Original Title: "Compared to the Gas Futures Market, ETHGas Aims to Be a Real-Time Execution Layer"
Original Author: Eric, Foresight News
On December 17, the Ethereum block space futures market ETHGas announced it had completed a $12 million funding round, led by Polychain Capital, with participation from Stake Capital, BlueYard Capital, Lafayette Macro Advisors, SIG DT, and Amber Group. Founder Kevin Lepsoe stated that ETHGas had previously raised an undisclosed $5 million Pre-Seed round in mid-2024.
In addition, Lepsoe stated that Ethereum validators, block proposers, and relay nodes have committed approximately $800 million to support market and product development. However, this is not a cash investment, but rather liquidity provided to the ETHGas market in the form of Ethereum block space.
Although the project is defined as a blockchain space futures market, its true vision is to achieve "Real-Time Ethereum."
Order of the Blocks
Ethereum co-founder Vitalik Buterin proposed the concept of a Gas futures market at the beginning of this month, aiming primarily to address the issue of Ethereum Gas price volatility. Similar to the logic of commodity futures in current markets, the main benefit of using futures to lock in future Gas fees is to make Gas costs predictable and controllable.
In this way, DApps can lock in gas costs before events such as users claiming token airdrops, and design activities to subsidize users. L2s can also buy futures when gas fees are lower to cover the cost of bundling and submitting data to L1, making transaction costs on L2 stable and predictable. This can serve businesses that require cost calculations in advance, such as tokenized US stocks.
According to the documentation, ETHGas will also launch a no-code tool called Open Gas, specifically designed for DApps to help them implement gas subsidy programs. This tool will allow users to claim the gas fees they have spent on using a DApp on the ETHGas platform.
There is not much difficulty in designing and developing a gas futures market; essentially, it just requires building a blockchain-based futures trading market with sufficient liquidity. However, the "ace up the sleeve" of ETHGas is the block space auction market.
This auction market is called Blockspace. Ethereum validators, block proposers, and relay nodes can auction the space in upcoming blocks to ensure that bidders' transactions are definitely included in the next block, as well as guarantee the efficiency of the transaction execution. Additionally, bidders can even auction the entire next block to ensure it contains only their own transactions or transactions provided by others through them.
Comparing transactions to packages, ensuring a block includes a transaction is like guaranteeing that a package is loaded onto a flight for transportation. Ensuring the execution of a transaction is like guaranteeing that the package will be delivered to a specific recipient on time. On the other hand, mining a complete block is like renting out an entire aircraft to transport your own package, while you can also sublet the extra space to other packages.
The ultimate goal of ETHGas is to enable "real-time transactions" on Ethereum through blockspace. This "real-time" label is in quotes because transactions on the Ethereum mainnet can only be finalized after a block is added to the chain. However, if a transaction can be guaranteed to be included in the next block, it can be considered "completed" in a certain sense. ETHGas can be understood as an execution layer built on top of Ethereum, but how real-time transactions will be specifically implemented on the frontend still awaits ETHGas's answer.
The core idea of ETHGas is to establish an orderly blockspace, rather than the current chaotic bidding process for blockspace, which involves numerous uncontrollable MEV (Maximal Extractable Value) transactions. By offering predictable revenue, ETHGas aims to attract infrastructure operators to join the Blockspace, creating sufficient liquidity to enable real-time transactions. The resulting efficiency improvements will attract various DApps. DApps, in turn, attract users through Open Gas, bringing more transaction volume into the ETHGas network and increasing the revenue of infrastructure operators, thus forming a positive feedback loop.
Challenges Beneath the Ideal Vision
For a DApp about to conduct a token airdrop, it is possible to estimate the number of transactions for claiming the airdrop and reserve a specific number of blocks (n blocks) after a certain time in advance. Combined with a gas subsidy plan, this approach can ensure a controlled budget and prevent network congestion during the token claiming event.
Although such a vision is appealing, allowing block space to be auctioned may cause many foreseeable problems.
First, if institutional users can auction block space without restrictions, they might purchase entire blocks in bulk and resell them to retail users. While this would ensure stable and secure income for validators, it would actually increase transaction costs for retail users. In this scenario, retail users lack the technical capabilities to compete with institutional users. Even if retail users could participate in auctions or hedge against rising gas fees using futures markets, the fundamental outcome would still be an increase in transaction costs.
In addition, the futures market could also become a tool for market manipulation. For example, large players might deliberately create a large number of on-chain transactions to increase gas prices and profit in the futures market, but this could lead to higher transaction costs for other users on the Ethereum mainnet. Moreover, as DApp operators, who are aware of specific time points for certain plans that could cause a surge in transaction volume, could profit in advance by manipulating the futures market. This would turn the futures market into an arbitrage market for those with information advantages, causing unpredictable losses for ordinary users who simply use the market for hedging purposes.
The emergence of a new trading market inevitably creates arbitrage opportunities due to information asymmetry, which can affect the market's ability to solve the problems it was intended to address. For ETHGas, balancing this issue and preventing a "virtuous cycle" from turning into a "death spiral" may require some necessary regulatory measures.
Click to learn about BlockBeats' job openings.
Welcome to join the official Lulin BlockBeats community:
Telegram Subscription Group:https://t.me/theblockbeats
Telegram discussion group:https://t.me/BlockBeats_App
Official Twitter account:https://twitter.com/BlockBeatsAsia