CMC News

Vitalik Proposes Ethereum Gas Futures To Hedge Fees

The $ETH co-founder has suggested building a prediction market for network transaction costs, giving users tools to manage fee #volatility. Vitalik Buterin outlined a trustless on-chain system Saturday that would allow locking in gas prices for future time periods.

Users frequently ask whether Ethereum's currently low #transaction costs will remain stable as network usage grows. Buterin argued that a futures market providing advance price discovery would address uncertainty while creating hedging opportunities for heavy network users.

The concept mirrors commodity futures, where participants contract to buy or sell assets at predetermined prices for future delivery dates. Applied to #Ethereum, the mechanism would let users prepay for transaction capacity at known rates, protecting against unexpected cost spikes during periods of network congestion.

Established futures markets would provide useful signals for developers, traders, and institutions planning activities that require predictable operational expenses. Applications processing high transaction volumes could budget more accurately with visibility into future gas costs.

The proposal encountered skepticism from industry participants. Hasu, who advises multiple #DeFi protocols, argued the market lacks natural participants willing to take opposite positions. Many users want protection against rising gas costs, but few entities benefit from betting on higher fees, potentially leaving insufficient liquidity for meaningful market formation.

#Buterin responded by questioning whether the protocol itself should provide counterparty liquidity. He suggested an auction mechanism for claiming base fee rights on specific gas quantities per block. Hasu countered that such a structure would extract most value back to the protocol, with buyers only participating if anticipating price increases, which undermines the shorting side necessary for balanced markets.