Clear DefinitionsGas Token
1 min read
Pronunciation
[gas toh-kuhn]
Analogy
Imagine a system where you get a discount voucher for cleaning up public space. You can earn vouchers when cleaning is cheap, and use them later to reduce the cost of making a mess when it's expensive. Gas tokens were like these vouchers for clearing data ('cleaning') on the Ethereum blockchain.
Definition
Key Points Intro
Key Points
Exploited the gas refund mechanism for clearing storage on Ethereum (pre-EIP-1559).
Allowed users to 'store' gas cost savings during low network congestion.
Tokens could be later 'burned' to receive a gas refund when fees were high.
Utility significantly reduced after Ethereum's EIP-1559 upgrade.
Example
A user on Ethereum during a period of low network activity (and thus low gas prices) could mint GasToken (like GST2) by paying a small amount of gas to write data to storage. Later, when gas prices surged, they could trigger the destruction of that stored data (burning the GasToken), receiving a larger gas refund and effectively reducing the net cost of their transaction.
Technical Deep Dive
Gas tokens leveraged the Ethereum Virtual Machine's (EVM) gas refund provided for setting a storage slot from a non-zero value back to zero (`SSTORE`). Users would write non-zero data cheaply when gas was low (minting the token, often using a small amount of gas), and later set the same storage slot back to zero when gas was high (burning the token), receiving a significant gas refund that could offset the cost of the transaction. EIP-1559 reduced the maximum refundable gas amount, significantly curtailing the economic viability of these tokens.
Security Warning
The value and utility of gas tokens were directly tied to the specific gas economics and refund mechanisms of the underlying blockchain. Protocol upgrades, like Ethereum's EIP-1559, could render them largely obsolete, leading to a complete loss of value.
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