Avalanche Octane Update Slashes Transaction Fees—AVAX Price Rally Incoming

Avalanches current C-Chain has, since its introduction, operated with the modified version of the EIP-1559 dynamic fee mechanism, leaving it with a static gas target of 15,000,000 gas per 10-second rolling window. While this delivered as expected, it had a worrying drawback – a huge spike in gas prices. This left most users stranded with large blocks consuming their full gas limit. According to an official blog post, this resulted in fee predictability and inefficiencies.

To solve this problem, an Avalanche Community Proposal 176 (ACP-176) was introduced to integrate the fee mechanism into the C-Chain to ensure that blocks that consume large amounts of gas are adequately supported. Adding the fee mechanism also ensures that transaction fees on the C-Chain are significantly reduced. Meanwhile, this is not the only goal the upgrade seeks to achieve.

Earlier, it was extremely difficult to adapt to performance optimization due to how changing the C-chains static target gas consumption rate demanded a carefully orchestrated network upgrade. The Octane upgrade fixes this by introducing a dynamic gas target adjustment that is based on the Primary Network Validator.

An excerpt of the Avalanche report reads:

The upgrade empowers validators to dynamically adjust the target rate of gas consumption, ensuring the network can scale more effectively in response to varying loads and future growth. A validator that values high transactions per second (TPS) and lowers gas fees may vote to increase gas consumption over time by setting their preference higher than the historical target. The higher the target gas consumption, the more resources that can be used by the network.

Instruction to Node Operators

Before the mainnet launch, Avalanche released a post instructing Fuji node operators to upgrade to v1.13.0-fuji. Mainnet node operators were also asked to upgrade to v1.13.0 before the activation time was mandatory. However, validators were informed to run a few tests to see whether their machines could support the resources needed to facilitate this level of gas consumption.

The native token of Avalanche, AVAX, has reacted to this news, surging by to trade at $17 in the last 24 hours.

According to our previous analysis, AVAX has the potential to hit $30 once the bull market returns. In the long run, Standard Chartered expects the asset to hit $250, as highlighted in our previous article. Until then, it could focus on moving within a tight range while trying to stay above a crucial support level.