Leveraging EIP-1559 Improvements to Minimize Gas Fees
Introduction
Transaction fees on the Ethereum Blockchain, known as Gas Fees, are part and parcel of every aspect of conducting business onchain. This includes activities ranging from registering a .eth name to minting an NFT from Zora. These fees are a variable cost, dependent on the demand for blockspace. When demand is high, so are the Gas Fees, and the reverse is true when demand is low.
Daniel Pfeffer and Dan Hannum realized that this issue could be mitigated by implementing a solution that allows users to submit transactions to the mempool when demand for blockspace is low. Initially incubated under Corpus Ventures, GasHawk transitioned from a venture studio product to an autonomous entity. This transition was aided by Public Goods Funding from ENS DAO. GasHawk optimizes Gas Fee savings by leveraging EIP-1559. The team created and continues to improve an algorithm that assists users in submitting transactions during periods of low blockspace demand.
In this article, we’ll dive into GasHawk's mission to bring its gas saving dApp to the masses, and explore how the ENS DAO’s grants program supports projects like this.
GasHawk’s Inception and Journey
Originally a product incubated by Corpus Ventures, GasHawk emerged as a key tool that aids developers throughout Ethereum in reducing Gas Fees. To date, GasHawk has successfully handled more than 8,500 TX from 4,900+ users. Daniel Pfeffer, now the CTO of GasHawk, played a pivotal role in the product's design, contributing significantly to its architecture and prediction algorithm.
GasHawk has since evolved into its own entity, with support from Public Goods funding from ENS DAO, particularly through its Small Grants and Large Grants programs. This support has been essential, not only in covering server costs but also in overcoming the financial challenges typically faced by public goods projects, thereby ensuring the continued success and impact of GasHawk.
EIP-1559
EIP 1559 introduces an algorithm defining the base fee on Ethereum, determined by multiplying a transaction's gas complexity. Gas is the unit for transaction costs, with a simple transfer requiring 21,000 gas. The base fee, denominated in ether fractions per gas unit, adjusts based on network usage. It remains constant within a block but changes incrementally between blocks, influenced by network capacity.
When a block is less than full, the base fee stays the same for the next block. If full, it increases by 12.5%, varying based on block usage. An empty block reduces the next base fee by 12.5%. This algorithmic approach precisely calculates costs, allowing modeling of network usage patterns, including spikes. GasHawk leverages this algorithm to strategically time transactions, optimizing gas savings effectively.
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GasHawk Optimizes Gas Savings
GasHawk addresses Ethereum’s variable transaction fees, known as Gas Fees, by leveraging the improvements introduced in EIP-1559. This involves strategically utilizing the algorithm to refine transaction timing, ensuring submissions occur during periods of lower demand for blockspace. By doing so, GasHawk helps users minimize costs during times of high network activity.
GasHawk functions as a buffer for your transactions, waiting to forward them to the Ethereum network when gas prices are low. Rather than directly submitting a transaction to the network, GasHawk queues these transactions. It then identifies the best timing for submission, considering user-specified deadlines and avoiding peak fee periods. This process is facilitated through GasHawk's RPC proxy, which is integrated with MetaMask. This approach not only ensures efficient transaction processing during fluctuating gas prices but also checks transaction executability and provides access to a private mempool for enhanced security and efficiency.
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How it Works
GasHawk integrates with wallets like MetaMask using a proxy RPC server. Users can easily set up GasHawk via a one-click process on their web application. Alternatively, one can manually add GasHawk by entering its network details into the wallet extension. It replaces the standard Web3 or Ethereum network gateway with GasHawk's proxy RPC server. Transactions from the wallet to the network are intercepted, queued, and sent based on the algorithm's decision within the user's specified deadline.
In GasHawk's user interface, users can easily set transaction deadlines ranging from five minutes to 24 hours, with the default setting being 24 hours. Each queued transaction allows for adjustments to its individual deadline. GasHawk's algorithm then predicts the development of the base fee cost, finding the optimal time within the specified deadline to execute transactions cost-effectively.
While there's no guarantee of always securing the lowest price, GasHawk consistently reduces costs, resulting in significant savings for its users. GasHawk buffers transactions, effectively avoiding spikes and optimizing for cost savings.
GasHawk's interface provides visual representations of transaction progress, showing key points like receipt, volatility spikes, and submission times.
A set timeline does not necessitate waiting for the entire duration. For time-sensitive transactions, users specify their preferred wait time, and GasHawk calculates the optimal moment to execute the transaction within that period. GasHawk is wallet-agnostic, offering compatibility with a variety of wallets. It supports diverse transaction types on platforms like OpenSea and Uniswap. Future development plans include expansion to other Layer 1 networks and Layer 2 solutions, enhancing its versatility.
Regarding security, GasHawk offers a significant advantage by enabling users to maintain custody of their wallets and private keys, thereby ensuring robust cryptographic security. Designed with a focus on security, GasHawk does not possess the ability to alter transactions, as they are cryptographically signed by the sender. Its primary function is to determine the most opportune timing for initiating transactions.
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ENS DAO x GasHawk Impact
As part of ENS DAO’s ongoing mission to support projects aligned with Article III, the Public Goods Working Group has continuously supported GasHawk, which offers its SDK in its repository, with several grants from both its Small Grants and Large Grants initiative. GasHawk used a portion of its grant to subsidize and refund user fees. The team has progressed from the Small Grants to the Large Grants phase under the Public Goods’ directive. They have most recently obtained a large grant of 50K USDC after demonstrating milestones, including the development of webhooks and a browser extension, enhancing GasHawk’s already attractive offering. They’ve also recently expanded their team, focusing on the development of multi-chain support.
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About ENS DAO Grants
The Large Grants opportunity from the Public Goods Working Group awards up to 50k USDC to applicable Ethereum or Web3 Public Goods.
This grant aims to provide a pathway for foundational Public Goods in the Ethereum or Web3 ecosystems to request more significant funding from the Public Goods working group. Foundational Public Goods in the context of this grant have exceptional usefulness or an established record of making an impact for users or developers.
To learn more, visit the ENS DAO Forum and make sure to follow ENS DAO for notifications of when the next Large Grants opportunity will begin.
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