There’s a saying in Nigeria that goes; “Awoof Dey Run Belle” well, luckily not this one we’re about to explore. The adoption of blockchain technology has seen a significant rise globally, offering innovative solutions across various industries. However, Web 3 users will know that one of the persistent challenges in the blockchain space is the issue of gas fees.
Gas fees on the Ethereum network have been a significant issue in the crypto space, with extreme prices, especially during the last bull run that made it challenging for users to transact. The land sale and public debut of Yuga Labs’ ‘Otherside’ metaverse NFT mint, which burned at $150M in gas fees, was a prime example of this. However, these fees are necessary to pay validators for their work in securing the blockchain and making transactions happen. Without gas fees, there would be little incentive to stake ETH and become a validator. Also one must understand that during times of congestion, the price of gas fees can go way up leading to purchasing problems.
This problem is particularly acute for developers in regions like West Africa, where economic constraints and infrastructural challenges amplify the impact of high transaction costs. The Internet Computer Protocol (ICP) offers a revolutionary solution through its reverse gas fee model, providing a more accessible and efficient environment for developers.
ICP Reverse Gas Fee Mechanism
Reverse gas fees, which can also be described as Zero gas fees is invented by the Internet Computer Protocol to curb the problem of exorbitant gas fee charges by other blockchain networks. Similar to the way some Web 3 platforms like YouTube or Facebook work, users do not pay for using these applications. The cost is carried by the platform running these services or undertaken by the developer, and users are not charged to use the network. Let’s explore how this works.
ICP which is a decentralized ledger (DLT) system built using canister smart contracts, are loaded with “cycles” or computation cycles, that power the network, cycles can be said to be equivalent to gas. Cycles can be held in a cycles wallet and transferred to canisters, which burn cycles and need to be topped up periodically.
Cycles are obtained by converting ICP tokens, providing an interesting use case for ICP and improving smart contract technology. Developers already have an idea of the cost of computation on ICP. ICP charges the canister smart contract for the resources it consumes. This allows developers to provide a smoother user experience, as end users are free from tedious tasks such as signing and approving every transaction they perform. This cost model is known as ICP’s ‘reverse gas model’. Developers can take advantage of the cycles faucet, which distributes free cycles to promote development on the IC, attracting more developers to the chain. Cycles loaded onto canisters can number in the billions and trillions.
By implementing a reverse gas fee model, ICP shifts the burden of transaction costs from users to developers, providing a stable, predictable, and economically accessible environment. Developers are not to be scared as this approach not only facilitates higher user adoption but also empowers developers to innovate without the financial and operational constraints imposed by traditional gas fee models. In this case, it is a win-win for everyone.
