Ethereum Gas Limit at 37.3M, TPS Up to 18 as ETH Eyes $4K
On July 20, Ethereum’s gas limit increased from 36 million to 37.3 million units, marking its first significant Layer 1 expansion since February. Nearly half of ETH validators now support boosting the gas limit further to 45 million to enhance scalability. As a result, network throughput climbed to 18 transactions per second (TPS), up from 15 TPS. The upgrade aligns with a 25% weekly rally in ETH, which gained 3.5% on the news as it approaches a $4,000 breakout. While a higher gas limit can speed up transactions and ease congestion, it may also raise storage and validation costs, impacting decentralization. EIP-1559’s fee-burn mechanism remains in place, so gas fees will still fluctuate with demand. Layer 2 rollups and client optimizations help offset these risks, but node hardware requirements could rise. Traders should monitor Ethereum gas limit hikes, throughput gains and fee dynamics for potential market opportunities and centralization pressures.
Bullish
Short-term, the gas limit hike to 37.3 M and increased TPS to 18 addresses congestion, potentially lowering gas fees and supporting further ETH price rallies toward $4,000. The market response—a 3.5% price gain—signals positive trader sentiment. Long-term, continued Layer 1 capacity expansion and client optimizations can drive broader DeFi, NFT and GameFi adoption, attracting institutional interest. However, rising node requirements may centralize validation. Overall, improved scalability and sustained demand underpin a bullish outlook for ETH, despite centralization risks.