Gitcoin Confirms Future Grants Round Will Run On L2 After Ethereum’s ‘Gaspocalypse’ Crisis

About a month after Gitcoin’s grants beta ended with donations exceeding $600,000 in a round subverted by high gas fee on Ethereum when the network was congested, the grants platform has said that its next round would run on layer 2. This is a move that puts a spotlight on one of the downsides of using Ethereum and reminds that its scalability is tied to layer 2 networks.

Donors began experiencing difficulties making donations with Ethereum midway into the grants beta round in May which Gitcoin launched to test its decentralised and customisable grants stack as it ended its centralised grants platform which it said had reached its limit in terms of impact.

Gas fees became as high as $25 to $50, resulting in some donors either reducing the amount they intended to donate or abandoning donations entirely. Gitcoin said, at the time, that the challenge was frustrating and recommended donating during off peak hours and prioritising projects because keeping many projects in carts could result in higher fees. Some users described the situation as ‘gaspocalypse’ and criticised Gitcoin for supporting only Ethereum when there were faster layer two options such as Optimism.

The surge in gas fee was caused by congestion on the Ethereum network which some blame on the increase in demand for the Pepe meme coin.

However, Gitcoin said on Monday that it would use layer two platform for subsequent rounds. Although it did not reveal the platform it would use, some people expect that it would adopt one of the platforms it is already collaborating with. The new layer two is expected to be revealed for the Gitcoin-hosted round in August.

We garnered invaluable insights during Gitcoin Beta on how to level up, especially in managing gas fees, Gitcoin stated.

Gitcoin has a long relationship with Ethereum. Quadratic Funding, which was first proposed in 2018 by Vitalik Buterin of Ethereum Foundation alongside Zoë Hitzig and E. Glen Weyl has been the core of Gitcoin’s grants round fund distribution since 2019.