Ethereum Boosts Transaction Capacity: Gas Limit Soars, Pectra Upgrade Looms

Ethereum's capacity to handle transactions has been significantly enhanced with the first gas limit increase since 2021. Validators have agreed to raise the gas limit to nearly 32 million units, allowing the network to process more transactions and complex operations within each block. This improvement comes as Ethereum co-founder Vitalik Buterin advocates for layer-2 expansion, with the upcoming Pectra upgrade expected to double the capacity of layer-2 networks.

The gas limit increase allows Ethereum to reduce congestion during peak times and attract users who might otherwise opt for lower-cost alternatives like Solana. This could rekindle interest in Ether (ETH), which has struggled against Bitcoin recently. One ETH fell to 0.03 BTC in January, its lowest level since 2021. However, with this improvement and Pectra's capacity boost on the horizon, Ethereum may see a rebound in investor sentiment and increased demand for its network services.

On Ethereum, gas measures the computational work needed to process operations like transactions or smart contracts. Raising the gas limit allows each block to handle more transactions or complex operations, reducing congestion and improving network efficiency. This could attract users to Ethereum who might otherwise opt for lower-cost alternatives like Solana.

The increased gas limit could rekindle interest in Ether (ETH), which has struggled against Bitcoin recently. One ETH fell to 0.03 BTC in January, its lowest level since 2021. However, with this improvement and Pectra's capacity boost on the horizon, Ethereum may see a rebound in investor sentiment and increased demand for its network services.