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, Ethereum block space futures market ETHGas announced the completion of 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 completed an undisclosed Pre-Seed funding round of approximately $5 million in mid-2024.
Lepsoe also mentioned that Ethereum validators, block builders, and relay nodes have committed around $800 million to support market and product development, though not as cash investments, but by providing liquidity to the ETHGas market in the form of Ethereum block space.
Although the project is defined as a block space futures market, its true vision is to achieve “Real-Time Ethereum.”
The Order of Blocks
Ethereum co-founder Vitalik Buterin proposed the concept of a Gas futures market earlier this month, with the core goal of addressing Ethereum Gas volatility. Similar to the logic of commodity futures in today’s market, locking in future Gas costs through futures primarily makes Gas expenses predictable and controllable.
This allows DApps to lock in Gas costs before events like users claiming token airdrops and design activities to subsidize users. L2s can also purchase futures when Gas fees are lower to manage 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 tokenizing U.S. stocks.
According to the documentation, ETHGas will also launch a zero-code tool called Open Gas specifically for DApps to help them provide Gas subsidy programs. This tool allows users to claim the Gas fees they consume on the ETHGas platform after using a DApp.
Designing and developing a Gas futures market is not particularly difficult; it essentially requires building a sufficiently liquid on-chain futures trading market. ETHGas’s “killer feature” is its block space auction market.
This auction market, named Blockspace, allows Ethereum validators, block builders, and relay nodes to auction space in subsequent blocks, ensuring that bidders’ transactions are included in the next block and guaranteeing the execution efficiency of those transactions. Additionally, bidders can even secure an entire next block, allowing it to contain only their own transactions or transactions provided by others through the bidder.
Comparing transactions to packages, ensuring block inclusion is like guaranteeing a package is loaded onto a transport plane, while ensuring transaction execution is like ensuring the package is delivered to the intended recipient on time. Securing an entire block is akin to chartering the entire plane to transport your packages, but you can also sublease the extra space to other packages.
ETHGas’s ultimate goal is to achieve “real-time transactions” on Ethereum through Blockspace. This real-time transaction is in quotes because completing a transaction on the Ethereum mainnet requires waiting for the block to be finalized. However, if a transaction can be guaranteed inclusion in the next block, it can be considered “completed” in a sense. ETHGas can be understood as an execution layer on top of Ethereum, but how real-time transactions will manifest on the front end remains to be seen as ETHGas provides answers.
ETHGas aims to establish an orderly block space, unlike the current system of chaotic bidding for block space, which includes many uncontrollable MEV transactions. By attracting infrastructure operators to Blockspace with predictable returns, sufficient liquidity is created to enable real-time transactions. The resulting efficiency improvements attract various DApps, which use Open Gas to attract users. Users bring more transaction volume into the ETHGas network, increasing returns for infrastructure operators and forming a positive feedback loop.
Challenges Beneath the Ideal Vision
For a DApp about to conduct a token airdrop, it can estimate the number of transactions for claiming the airdrop, reserve n blocks after a specific time in advance, and provide a Gas subsidy program. This ensures a budget-controlled token claim activity without causing network congestion.
Although such ideas are appealing, allowing block space to be auctioned may lead to many foreseeable issues.
First, if institutional users can auction block space without restrictions, they might secure entire blocks in large quantities and resell them to retail users. While this ensures stable and predictable returns for validators, it could raise transaction costs for retail users. In this scenario, retail users lack the technical capability to compete with institutional users. Even if retail users can participate in auctions or use futures markets to hedge against rising Gas fees, transaction costs would still increase in essence.
Additionally, the futures market could become a tool for market manipulation. For example, large players could artificially create a large number of on-chain transactions to drive up Gas prices and profit from the futures market, potentially raising transaction costs for other users on the Ethereum mainnet. Furthermore, as DApp operators, knowing the specific timing of events that could cause a surge in transaction volume, they could profit in advance through operations in the futures market. This could turn the futures market into an arbitrage arena for those with information advantages, causing unpredictable losses for ordinary users who simply use the market for hedging.
The emergence of a new trading market inevitably creates arbitrage opportunities due to information asymmetry, potentially undermining the very problems the market aims to solve. For ETHGas, balancing this issue and preventing the “positive feedback loop” from turning into a “death spiral” may require some necessary restrictions.
