USDEthereum’s Gas Limit Jumps First Time Since the Merge as Eric Trump Fuels Market Buzz
Network Expansion Unlocks New Capabilities
Ethereum recorded a major milestone on February 4, 2025, when its gas limit reached a historic 35.3 million at block 21,771,507, marking the first increase since its transition to Proof-of-Stake in 2022. The adjustment followed a validator vote in which 52% of participants supported raising the gas limit, according to Gaslimit.pics. While Ethereum’s official gas limit is now set at 32 million, expectations point to further expansion, possibly reaching 36 million in the near future.
The last adjustment occurred in late 2021, when the limit jumped from 15 million to 30 million. Industry experts highlight that increasing the gas limit improves Ethereum’s ability to process transactions, reduces congestion, and enables the execution of more complex smart contracts and decentralized applications. However, concerns remain about the higher processing requirements imposed on network nodes, which could challenge decentralization efforts.
Ethereum co-founder Vitalik Buterin endorsed the decision, emphasizing its alignment with Layer 1 scaling initiatives. He referenced Ethereum Improvement Proposal (EIP) 4444, which aims to ensure that higher gas limits do not undermine decentralization. Buterin also proposed a governance shift that would allow Ethereum stakers to vote on blob targets, enabling automatic increases without requiring hard forks. Ethereum educator Anthony Sassano projected that gas limits could reach 50 million by the end of 2025, significantly boosting the network’s transaction capacity.
Ethereum's supply dynamics also saw a shift as the network turned inflationary again, marking two years and 143 days since the Merge eliminated Proof-of-Work mining rewards. The introduction of blobs in the Dencun upgrade in April 2024 slashed Layer-2 transaction fees, reducing the amount of ETH being burned. As a result, Ethereum’s daily net supply has increased by approximately 1,570 ETH.
The transition to Proof-of-Stake had previously driven Ethereum into a deflationary phase, with supply dropping by over 450,000 ETH—valued at $1.6 billion at its peak and approximately $1.2 billion today. The Dencun upgrade introduced a mechanism in which Layer-2 transactions settle using temporary data blobs instead of traditional calldata, cutting storage requirements and lowering transaction fees. However, because blobs expire after 18 days, less ETH is being burned, shifting Ethereum’s supply model toward inflation.
Analysts note that had Ethereum retained its Proof-of-Work model, inflation would have been significantly higher at 3.3% annually, adding 9.5 million ETH to circulation—equivalent to nearly $25 billion at today’s prices. Despite the inflationary shift, Ethereum’s transition to Proof-of-Stake remains a major efficiency breakthrough, reducing energy consumption by over 99.9%.
Looking ahead, Ethereum’s upcoming Pectra hard fork, scheduled for March 2025, is expected to double Layer-2 transaction capacity by increasing the blob target from three to six. This expansion aims to enhance scalability for decentralized finance applications, blockchain-based gaming, and high-throughput smart contracts.
Buterin suggested incorporating a governance mechanism allowing Ethereum stakers to vote on future blob capacity increases, ensuring flexibility while maintaining decentralization. The announcement of the Pectra upgrade triggered a 7% rally in Ethereum’s price, pushing it from $2,300 to over $2,800 in 24 hours.
Meanwhile, political interest in Ethereum has intensified, with Eric Trump posting a bullish tweet stating, “In my opinion, it’s a great time to add $ETH.”
Although he later removed the phrase “You can thank me later,” the timing of his statement coincided with significant Ethereum transactions linked to World Liberty Finance, a Trump-affiliated entity. Within seven hours, the organization accumulated 86,000 ETH, increasing its total Ethereum holdings to $421 million, which now comprises 65% of its portfolio.
Previously, World Liberty held $218 million worth of ETH alongside $60 million in Lido Staked ETH (stETH). Data from Arkham Intelligence revealed that World Liberty moved substantial amounts of ETH and stETH to Coinbase, CoW Protocol, Lido, and Gnosis. While such transactions typically signal a sell-off, the accumulation trend suggests a long-term strategic hold.
World Liberty Financial also executed over $250 million in Ethereum, Wrapped Bitcoin, and other asset transfers from its multi-signature wallet. The organization stated that these movements were routine treasury reallocations for operational expenses. However, as of February 2, 2025, its treasury holdings have dwindled from over $400 million to less than $90 million.
Among the largest transfers, $168 million was moved in Ethereum, alongside $64 million in Wrapped Bitcoin, with a considerable portion routed to Coinbase Prime. Market observers speculate that the involvement of Coinbase Prime could indicate liquidation activity, though World Liberty has repeatedly reassured its followers that they are not selling. This marks the second time the organization has emphasized its commitment to holding assets, following a $100 million crypto purchase in January 2025, which included $47 million in Ethereum.
At the time, World Liberty suggested that the acquisition was meant to commemorate Donald Trump’s potential return to the U.S. presidency as the 47th president. The Trump-affiliated DeFi platform still holds 1 billion WLFI tokens for sale at $0.05 each, with Donald Trump, Donald Jr., Eric, and Barron Trump listed as "Web3 Ambassadors" for the project.
This article has been refined and enhanced by ChatGPT.
