This Art Blocks drop just cost $1,000,000 in GAS.
Glitch Crystal Monsters by Alida Sun dropped on the platform yesterday causing Ethereum gas prices to surge to over 1000gwei.
At 5pm GMT on the 23rd of July, the art block’s project ‘Glitch Crystal Monsters’ dropped, as many eyes were on the project a gas war was expected. While the initial mint cost 0.1eth($200), buyers had to pay on average 0.7eth($1400) per piece due to the extraordinary gas prices. In this article I’ll be looking at what causes gas price surges and what can be done to prevent them.
Lets begin with explaining what gas actually is. Gas is used to measure the fee associated with every Ethereum transaction, gas price is measured in GWEI (each gwei is 0.000000001 eth) and each transaction will require a certain amount of gas based on its complexity. So the final transaction fee is Gas * Gas Price.
Using this transaction of the minting of a glitch crystal monsters piece as an example, we can see the gas price set was 1,300 gwei and the amount of gas used was 397,681.
Hence, 397,681 * 1,300 = 516985300 gwei -> 0.5 eth total transaction fee
Why does gas price get so high during drops?
Simply put, only a certain amount of transactions can occur per block, thus miners will prioritise transactions set with a high gas price, as there are more buyers than pieces available, buyers will increase their gas prices to outpace other buyers, thus causing a gas war.
What are the solutions?
I’ll be discussing potential solutions in this section, however these solutions are usually on the curators of the drop or developers to implement and not something individuals can do to prevent gas wars.
Layer 2 chains could be used for minting and then bridged to Ethereum. The potential downsides to this approach is the friction required to get to a layer 2 which may affect sales, for bigger drops like art blocks the demand would still be high enough for this to be a non issue. Another downside would be the centralisation of sidechains, other solutions such as rollups are not yet ready for the public and developers will require time to understand and create solutions using them.
Alternative drop structures
Other types of drops can be used to avoid gas wars, for example a lottery system or a Dutch auction in which a base price is set which lowers over time.