Ethereum co-founder Vitalik Buterin is promoting a new mechanism to reduce the rapid increase in transaction costs on the network.
His latest proposal will describe an oracle-less prediction market on the blockchain designed to help users hedge gas price volatility and manage it rather than react to it.
Buterin supports a market for pricing Ethereum's gas.
On December 6, Buterin argued that Ethereum needs market-based signals for future block space demand.
The structure will trade based on the network's Base Fee, allowing participants to buy or sell gas bonds linked to future time periods.
According to him, the goal is to provide developers and heavy users with a way to stop costs and plan, even when the actual gas prices remain low.
This proposal comes at an unusual time, as gas prices are near multi-year lows.
Data from Etherscan shows that the average gas price of Ethereum is about 0.468 Gwei or approximately three cents. As retail activity on the network moves to cheaper Layer 2 networks like Base and Arbitrum.
However, Buterin argues that the current calm leads to complacency.
He emphasized that creating a futures curve on the blockchain would provide clear signals of long-term market expectations. It allows users to pre-pay for block space and stop costs regardless of future increases.
People will receive clear signals of future gas fee expectations. They can also hedge against future gas prices by prepaying fees for a specific amount of gas over a defined period, he said.
Industry experts express opinions.
Proponents view this proposal as a significant milestone underestimated in Ethereum's long-term design. They argue that a trustless gas futures market will fill structural gaps rather than offer further DeFi innovations.
Their view is that the BASEFEE market will help align expectations with transparent pricing, providing a common reference point for the ecosystem for future network conditions.
Thus, a liquid market for gas futures may change this dynamic by allowing developers to buy gas insurance to reduce pre-event operating costs. Heavy users can also mitigate the problem of rising fees in advance by taking opposite positions in the market.
If Ethereum is becoming a settlement layer for everything, then gas is becoming a financial asset. Thus, a trustless gas futures market is not something good to have. It feels like a natural evolution for a network aiming for global coordination, analysts state.
Meanwhile, an industry consultant at Titan Builder stated that executing this as a classic derivatives market would be difficult because validators could manipulate outcomes through empty block production.
He added that a futures market for block space with sufficiently liquid secondary venues remains possible. Such structures may be enough to support price discovery and hedging.
