Outta Gas — EIP-1559 come save me!

A dream without ambition is like a car without gas… you’re not going anywhere.

Sean Hampton

by MD, cryptochefs. All views are MD’s own

I ran out of gas earlier this week. I hadn’t noticed it going down, down, down. And sure enough, I now didn’t even have enough to swap something else for more gas.

That’s right, I’m not talking about gasoline, but ETH in the ethereum ecosystem. It’s been a hot topic for some time, and it’s a story that won’t go away when it’s costing $60+ for a simple trade.

I was pretty stuck. I had other crypto assets but I couldn’t swap them to ETH without any ETH in the first place. And I was trying to be disciplined about keeping my fiat and crypto seperate. I didn’t really want to transfer fiat to buy more ETH, in the same way as I don’t cash out crypto to buy fiat.

I’m a big fan of ethereum, particularly all the DeFi options . I’ve worked all my life in finance and I find it fascinating to watch this nascent financial ecosystem take shape. From simple staking of funds to hedging contracts and the emergence of sythetic assets, DeFi is moving at breakneck speed towards the full product set of traditional finance. And I think DeFi will face a lot of the same hurdles that fiat finance has faced over the decades and centuries. There are some important lessons to take from this, but that’s a topic for a whole other day.

So, back to my gas issue. I did have a tiny bit of ETH on a different wallet. Sending it to my trading wallet would just about annihilate all the ETH that was there. So I tried setting the gas fee down to a very low level and just seeing how long it would take.

It eventually gave up and failed. In the end I did the only thing I could do, and ramped some more fiat into binance.

But this all got me thinking three things:

  1. EIP-1559: I hope you save us!
  2. There needs to be a way of buying ETH that allows you to include the gas fee in the amount of ETH that is being bought. In other words, you should be able to buy ETH without holding any ETH, in the knowledge that the gas fee will be clipped from your proceeds.
  3. How much volume is being driven to other layer 1s like BSC, purely to escape gas charges?

I won’t cover EIP-1559 in detail here, there are so many excellent articles on the topic, just stick that term in a search engine. But what I will say is this: make sure you don’t run out of gas!