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A new token saves Ethereum commissions by “storing” gas

June 9, 2020

Ethereum (ETH) commissions are coded so that they are only paid in ether. However, with a brilliant trick in smart contracts, users can effectively pay for gas with a special token, which reduces the commission associated with the operation.

This principle was applied by the team behind 1inch.exchange, a decentralized exchange aggregator. For the launch of the Chi token, the technology was officially announced on June 5 and builds on an earlier iteration of the concept, the Gas Token (GST).

How does it work?

Chi-Token uses a mechanism that refunds gas when space is released in the Ethereum virtual machineIn the case of gas tokens, burning dummy dummy smart subcontracts that were created when the tokens were minted. According to the team, this is more efficient than deleting data directly.

A new token saves Ethereum commissions by “storing” gasA new token saves Ethereum commissions by “storing” gas

Chi tokens are created when gas prices on Ethereum are low so that the user can “save” that price for later useAs 1inch.exchange CEO Sergej Kunz explained at the ETHGlobal hackathon, this is particularly useful for implementing smart contracts, an operation that can consume millions of gas. In order to put this in the right light, the total gas limit for a block is currently 10 million.

To save commissions, The token must be burned along with the main operation, which reduces the total amount of gas used for this transaction, This is because the refund process cannot result in zero or negative total gas consumption. This means that it has to be combined with another action to be effective.

However, the developers of Chi say so The token can reduce the price of a transaction by up to 50%.

The impact of Ethereum commissions on the market

The ability to set low gas prices during downtime could have a significant impact on Ethereum’s commission market.

As Vitalik Buterin and other developers emphasized in their discussions about the previous gas token, The mechanism could lower the gas price between periods of high and low activityUsers would stock up on tokens when it was cheap and would use them when gas prices went up, balancing out all the gas needs.

Anton Bukov, CTO of 1inch.exchange, was skeptical that the Chi token would change the economy of Ethereum commissions:

“I think this doesn’t change anything except that users have the ability to tag and speculate on the price of gas.”

Promote adoption

Bukov noted that the Chi token already has a use case on the 1-inch platform. This allows users to save commissions with token exchange.

On the other hand is the gas token born in 2018 The adoption failed because “very few people understood how it worked”.Kunz said to Cointelegraph.

Bukov said that GST also had a problem interacting with the ERC-20 standard, which led to it “The wallets and even Etherscan are showing wrong amounts.”

While GST was used primarily by referees, Kunz noted: The direct integration into 1inch.exchange also aroused the interest of other usersIt was also shown that some decentralized financial service providers are trying to integrate the chi token into their systems.