Can they beat their gas-paying competitors?

As blockchain technology and cryptocurrencies continue to gain widespread popularity and adoption, the persistent fluctuations and increases in gas fees on Layer 1 blockchains such as Ethereum have become a concern for developers and users.

However, with many existing blockchain projects, the terms “Layer 1” and “gas fees” can be confusing if you lack some background knowledge or context. So in this piece we discuss Layer 1 blockchains and their gas fees.

What is a Layer 1 Blockchain?

Create 1 blockchain or base layer chains or mainnets are standalone blockchain protocols. That is, they are not built on any other blockchain network and provide the foundation for a blockchain ecosystem. Therefore, they are responsible for managing the blockchain’s basic functions such as consensus, mining and transaction processing.

These blockchains are decentralized, secure and immutable and often have a native token that rewards validators or miners who maintain the ecosystem. Layer 1 blockchains also support smart contracts, DeFi and dApps, while providing a secure and transparent approach to storing and exchanging data. Examples include Ethereum, Cardano, Avalanche, Solana, Binance Smart Chain (BSC), etc.

However, transactions on these blockchains often incur gas fees, which have become a hot topic in the blockchain space over time.

Layer 1 gas taxes explained

Gas tax is the amount paid to process a transaction on a blockchain network. Layer 1 gas fees are transaction costs associated with processing transactions on the main network of a blockchain ecosystem.

They are measured in the blockchain’s original currency. For example, gas fees on the Ethereum blockchain are paid in Ether (ETH) and are used to reward validators for processing and validating transactions.

Gas taxes are is calculated based on the complexity of the transaction. The more complex a transaction is, the more gas it requires, summing up to a higher fee. Other factors that affect gas fee fluctuations on Layer 1 blockchains include transaction demand, network congestion, and current gas fee. Gas charges increase with higher demand and congestion and decrease with lower demand. Below is a comparison of the leading Layer 1 blockchains and their current gas fees:

Ethereum

Ethereum is the leading blockchain network in terms of smart contract functionality. However, its popularity has increased traffic on the blockchain network, leading to notoriously high gas taxes, which most users have criticized. Even after the transition from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) model, gas fees on the blockchain continue to rise.

At the time of writing, the average cost to perform a single transaction on Ethereum varies between 80-100 Gwei. However, during periods of high congestion, the cost of gas on Ethereum can easily exceed 500 Gwei.

Binance Smart Chain (BSC)

BSC is a Layer 1 blockchain solution that leverages its PoS model to provide faster and cheaper transactions than Ethereum. The blockchain is also popular due to its smart contract functionality.

BSC offers lower gas charges and improved throughput, making it attractive to developers and users. At the time of writing, the average gas fee on BSC is between 5 Gwei and 10 Gwei per transaction. However, BSC is criticized for being more centralized than Ethereum. The blockchain is controlled by Binance, the largest centralized cryptocurrency exchange.

Exploring gas-free, more innovative Tier 1 solutions

Gas-free layer 1 blockchains are innovative solutions that do not charge users gas fees to process transactions. Although this blockchain model is relatively new and not widespread, it is gradually gaining ground.

For example, established blockchains such as Solana and Avalanche are already implementing gasless transactions to solve the scalability challenges older blockchain solutions meet. However, they are not alone, as newer Layer 1 blockchains such as ReserveBlock and Metatime have already adopted a gasless approach.

ReserveBlock

ReserveBlock is an open source, decentralized, autonomous and peer-to-peer (P2P) layer 1 blockchain governed by validators through on-chain voting. ReserveBlock uses a floating Proof of Assurance (PoA) consensus to democratize mining without the burdens and frictions associated with the PoW or Proof of Stake PoS consensus models. The network is gas-free and has no locking or holding periods. In addition, the development team has also announced that the project will be listed on MEXC March 10, 2023.

Conclusion

Different layer 1 blockchains have different gas fees. While Ethereum’s gas fees are the highest due to its popularity and network congestion, Avalanche, BSC, aims to offer lower gas fees and faster throughputs.

Users should avoid using networks during high congestion to significantly reduce gas charges. They can also use a gas fee estimator to determine optimal transaction fees. In addition, developers can optimize smart contracts to use resources efficiently, and reduce gas taxes.

Gasless Layer 1 blockchains, however, offer users a user-friendly, practical and cost-effective experience. With these solutions, users do not have to worry about incurring additional transaction fees when transacting on the blockchain. However, when they are in their earliest stages, these gasless blockchains can have security challenges.

As with any Layer 1 blockchain, it is critical to weigh the pros and cons before using them for transactions or applications.

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