Pivoting Ethereum Dapps in the Age of High Gas Prices
Our journey to reduce gas usage turned into so much more
High Ethereum gas prices are the new normal, and they’ve rendered many tokenized virtual economies infeasible.
In order to thrive in a high-gas Ethereum network, it was important for us to refocus on our core technology. This is a short story about ImmutableSoft, a nonprofit in this space, as we journeyed to reinvent our Dapp so it would be positioned to thrive in the face of high gas costs.
The Ethereum community shouldn’t be expected to lower gas prices because this isn’t in their best interest. High gas prices create demand for their product, ETH. Realizing this allows one to move forward and plan for high gas prices as the new normal.
The first step we took was to move our ERC20 token to an ERC777 token, eliminating the approve transaction for each transfer. This wasn’t enough. Next, we eliminated our ERC20 token entirely. Philosophically this was a difficult decision to make. Much of the philanthropy of our nonprofit was tied into allowing other nonprofits to earn tokens. Our referral program also had to be scrapped, as there are now no tokens to reward. Without a token, the default Ecosystem monetization now uses ETH instead of a utility token, eliminating complexity and reducing gas costs.
Every transaction to a smart contract incurs gas costs associated with the transfer of ETH, regardless of whether ETH was transferred or not. In a high-gas world, it’s advisable to take advantage of this.
The best side effect of eliminating our ERC20 token, however, was on the legal front. With no more SEC to worry about, our need to gather intrusive KYC data on users evaporated. Also of high importance, the move from a native token to ETH exposed our core technology. Immutable software release, distribution, and activation sales are now at the forefront of our message, without the complicating umbrella of using a novel token. We now find it easier to communicate our core technology to others, solidifying this change as a positive improvement overall.
From a gas price perspective, however, this was still not enough. When an end user purchases an activation for a software product in our Ecosystem, an activation is created on the blockchain that validates an individual installation of the software at runtime. These activations typically expired but could be resold for the remainder of their life when valid. Investigating further, we determined that each activation could be represented as a unique ERC721 token. In fact, by doing so, we could inherit much of the functionality we needed from the ERC721 standard, saving contract-deployment costs while reducing runtime gas usage considerably using the optimized ERC721 implementation from OpenZeppelin.
As a further bonus, our core technology is now this new ERC721 activate token. Discussions of this token directly lead to discussions about our core technology, instead of away from it. But the most important benefit of this change might prove to be interoperability. Unique ERC721 activations are minted for end users who have purchased directly from software creators through the Immutable Ecosystem. Each token can activate a local software instance, and as an ERC721 standard, can also be transferred and/or offered for sale outside of our Ecosystem. Interoperability increases the value of the product activations created on the Ecosystem while opening the door to easy integration and collaboration throughout the Ethereum community of Dapps.
In conclusion, to thrive in a high–gas price Ethereum world, it’s important to trim down and pivot your Dapp so it unambiguously showcases your core innovation. This could include eliminating utility tokens and/or embracing open standards in unique ways that strengthen and showcase your core innovation.
