Increase Minimum Gas Price Threshold to 25000000000 wei

Governance Governance Proposals
1

Proposal Key Aspects

  • Receiver Entity: Celo Governance

  • Status: DRAFT

  • Title: Increase Minimum Gas Price Threshold to 25000000000 gwei

  • Author(s): Martín Volpe (@martinvol)

  • Type of Request: Network Decisions & Protocol Improvements

  • Funding Request: N/A

  1. Summary

This post proposes increasing Celo’s minimum gas price with the goal of enhancing network security and generating additional revenue for the protocol. With the explicit goal of keeping stablecoin transfer fees at approximately $0.001 (one tenth of a cent) when paying for gas with stablecoins, the proposed adjustment would increase the current minimum gas price.

  1. Motivation

A higher minimum gas price helps mitigate spam attacks while keeping transaction costs low enough to support real-world applications, particularly in emerging markets where affordability is critical. This change also improves the protocol’s sustainability by increasing revenue per transaction, which can be allocated toward future Layer 2 costs, such as paying for data availability with EigenDA and covering Layer 1 fees. Additionally, raising gas fees has the potential to increase total fees spent on the Celo network, a commonly referenced industry metric when comparing blockchain ecosystems.

In the short term, this adjustment may lead to a decline in transaction volume, particularly from low-margin arbitrage activity where certain transactions may become unprofitable. However, this could also result in lower long-term storage cost for validators, as fewer transactions will need to be processed and maintained over time.

Looking ahead, as Celo transitions to an L2 with the introduction of L1 fees and EigenDA, this increase is expected to help offset these costs, ensuring that transactions remain affordable after the L2 upgrade. After the L2 transition, we expect this change to be sufficient to offset these new fees. This reinforces our commitment to maintaining affordable transactions after the L2 upgrade.

  1. Specification

N/A

  1. Metrics and KPIs

Current tx fee for a stablecoin transfer is about $0.0003, away from the target of $0.005.

  1. Current Status

Ready to be proposed.

  1. Timeline and Milestones

As soon as possible.

  1. Detailed Budget

N/A

  1. Payment Terms

N/A

  1. Team

N/A

  1. Additional Support/Resources

N/A

The full proposal with further details can be found here.

Volpe, on behalf of the cLabs Primitives team.

7 Likes
2

Yet another proposal that leads to the conclustion that we should let the DAO decide how much.

3 Likes
3

How much what exactly? How?

2 Likes
4

This price increase is 5x!, for us at G$ where we sponsor gas fees, it is a major change.
What exactly are the calculations for this price?
Do other L2 chains have a minimum cost?
Are there actually spam txs?
What happens in times when Celo token price goes up? Then you will be above the target cost.

3 Likes
5

It’s not really a major change because fees remain very low compared with pretty much every other L2. Source.

How much does this actually impact you in absolute terms? I’d be surprised if you actually spent more than $1 on fees daily (and that’d would be more than 6K transfers daily, assuming you sponsor pay the fees in Celo).

It’s hard to judge what is or what is not a spam tx, but you can see “low value tx”. It’s common to see on Celo tx sending less than a cent, which blockchains are not meant to support.

The calculations are shown in the proposal itself. Yes, every chain has a minimum fee.

If the price of Celo goes up (good problem to have I guess), we can update this parameter again, but I don’t think we should prepare for that right now as we don’t have the crystal ball.

Most of these questions have answered last time we discussed this.

3 Likes
6
  1. The numbers in the source are incorrect.
    You can find at the bottom median tx costs
    https://dune.com/Marcov/layer-2-transaction-cost
  2. I dont see any calculations explaining the costs of eigenda or costs for validators.
  3. We have 50K daily users, so we are sponsoring much more than 6k daily txs and at the top we had 3x ore more, at the top it was roughly 3k USD per month, so 5x costs increase would be significant
    4.the minimum fee on arbitrum is 0.01 gwei which is roughly 0.00000003USD with eth at 3K$, celo minimum fee is 5e9 gwei which is roughly 0.0000000125 USD with celo at 0.5$, so compared to arbitrum an increase of 10e9 makes more sense
  4. this seems like a forced solution to a different problem of getting more TXs on celo which @demo commented in the previous proposal
1 Like
7
  1. The numbers are not incorrect, they are different tx that are measured. The table I quoted is for sending eth and a erc20 swap, while the one you quote is an average of all txs.
  2. Validators are not affected by this (it’s base fee that changes, not tip). After the L2, we expect the cost to be about the same all-in-all.
    3.1. Good to know, and I am surprised. I want to point out you are choosing to sponsor all those tx in a daily basis, there are different ways to do that cheaper or by passing the cost to the user. I don’t think we need to tailor to particular needs. If you tomorrow say that it would be better for your project to pay users 10x a day instad of once and need the gas to be even lower, Shall we support that?
    3.2. That’s a minimum fee on Arbitrum, but that’s not the one that’s realistically paid by users. You can see in the link I posted that it is actually way more expensive.
  3. I don’t see a post by demo in the forum post we sent last time. Ultimately, the project is in much better shape if it has more revenue, and I think that’s hard to argue against.
2 Likes
8

i’m not sure what you mean about arbitrum, here’s a recent tx for 350k gas which paid 0.01gwei per gas.

if it doesnt effect the validators what’s the rational? all in all it seems like an arbitrary number thrown. (i cant find the demo post, maybe i mixed it up with another), but thats the gist of other comments I saw. That its an arbitrary number. Still you did not provide any calculations why, except an arbitrary random target cost.

Our use case should not be considered per se, it was just to point out that a 5x increase is not trivial.

Like in previous proposals suggestions, the price target should be justified, otherwise the price should be kept or increase 2x tops. or maybe some gradual increase over a long period of time.

regarding spam. I dont think spam is low value txs, spam has specific purpose, usually malicious or exploitative nature.

1 Like
9

In that Arbitrum tx is paying more than a cent for a swap, it’s more expensive than then one that we’re proposing. I don’t understand what point you’re trying to make.

The rationale is to decrease spam and to increase protocol revenue. The numbers are explained in the proposal, it comes down to the fact that making a transfer is way below the fraction of a cent target. At the end of the day, every target is going to be arbitrary in a way and no simulation is going to be accurate enough to be worth running it.

Spam is spam, I’m sure the offers I get in my email inbox are valuable somewhat, that doesn’t mean they aren’t spam. If someone is making a transfer of less than a cent, I don’t see any realistic explanation of why that transaction needs to be on a blockchain. The numbers that we’re talking about here are still meaninglessly low even in for the most vulnerable places on earth.

3 Likes
10

I’ve compared arbitrum min gwei price USD to celo min gwei price. which is 2x of celo.
so making the minimum swap cost in USD similar to arbitrum would mean 2x increase in gas price and not 5x. further cost increase should be based demand increasing the base fee.

You keep saying the numbers are explained in the proposal, maybe i’m missing something or your are referring to some other link, but I dont see any numbers related to l1 fees which seems like the only real reason to increase the tx cost.

If all numbers are arbitrary I again propose that a gradual increase takes place and analyzing along the way

  1. “spam txs” - defining what it is and measuring the decrease
  2. ability to pay l1 fees
  3. any other metrics that are relevant
11

You said “Increase Minimum Gas Price Threshold to 25000000000 gwei”
I may say “Increase Minimum Gas Price Threshold to 15000000000 gwei”

Who is right, who is wrong?

Lets vote the numbers on that!

How Celo community can vote the numbers?

Read here–> Calculate and Vote The Numbers

If you dont understand it, ask me questions…

1 Like
12

Agree 100% that we need to explore ways to increase our revenue. That being said, this is not an easy matter, and it might require something way more complex than merely increasing gas fees. I don’t know; we might need to copy something or another done by financially successful chains like Tron and Base.

It’s going to be tough though, because minipay in Africa is centered around ultra low transaction fees.

But something definitely needs to change. The way things are going right now, we really don’t have much in the way of a legitimate business model.

2 Likes
13

Thanks @martinvol for posting the proposal, please edit your initial post and change the label to [FINAL], at my end this proposal is fullfilling all the requeriments:

  • Post a proposal in the Celo Forum and leave it for discussion at least for seven (7) days.
  • Present Proposal in a Governance Call and address the feedback received: Proposal was presented during Celo Governance Call #59 | February 6th, 2025

With the above said, from my end the proposal is ready to move into the voting phase when proposer wants to move forward or consider is appropiate.

:bangbang: Remember Current Celo Governance Overview & Procedures

To proceed to the submission and voting phase at least two Celo Governance Guardians must post explicitly that the proposal fulfills the requirements to be able to move into the Voting Stage in the proposal thread on the Celo Forum.

Remember next steps

  • Submission of PR to Celo Governance Repository
    Proposers needs to fork the Celo Governance Repository and add a PR including the proposal .md file and json file.
  • Approval of PR by Celo governance Guardians and merge into main branch of Celo Governance Repository.
    Celo Guardians are responsible for conducting a comprehensive review of every Pull Request (PR) to ensure that there is complete alignment and consistency between the final proposal posted in the forum post and the specific files that are being requested to be merged.
    This review process is strictly technical in nature, focusing solely on verifying the authenticity and good faith of the proposers. It does not involve any personal opinions or biases regarding the merits or content of the proposal itself. To maintain the integrity of the Celo Governance repository, it is mandatory to obtain approval from a minimum of two Governance Guardians for each PR before it can be merged into the main branch.
  • OnChain Submission of Proposal
    After PR is merged into main Governance Repo the proposers needs to fork locally the Celo Governance Repository and submit the proposal onchain using the guidelines described in the Celo Docs.

CC: Governance Working Group (@annaalexa @Wade @0xGoldo)

14

Thanks, @martinvol, for sharing the proposal. Also from my side, the proposal now meets all the required criteria:

  • It has been posted on the Celo Forum and remained open for discussion for at least seven (7) days.
  • It was presented during Celo Governance Call #59 on February 6th, 2025, and the feedback received has been addressed.

With that in mind, I see the proposal as ready to proceed to the voting phase whenever the proposer feels it’s the right time.

1 Like
15

@martinvol
I have to agree.

This is absolutely a random number. a 5x increase doesn’t make any sense.
The only rational justification would be to cover l1 gas costs, but non of the costs estimations for that were shared.

2 Likes
16

So we have to calculate the l1 gas costs. How can we do that?

1 Like
17

Here’s the optimism formula.
We can probably also sample some txs from optimism

2 Likes
18

Hey @martinvol ! Interesting initiative that deserves attention.

Our point of view around this topic is defining gas parameters should be accompanied by defined short-term and long-term user operation goals/expectations.

On top of that, if the mininum gas price proposed here is validated as affordable, a second important point to explore is to manage the demand and blockspace supply. For example, since execution and data fees are explicitly separated, EIP-1559 parameters (Gas Limit, Gas Target, etc) could be adjusted at points where the demand is met, in order to impact positively in revenue. E.g. other L2s such as Base have been periodically updating its gas parameters.