## Can ETHGas's $12 Million Funding and $800 Million Liquidity Commitment Reshape the Ethereum Block Space Market?

A project called ETHGas has recently gained attention because they accomplished two major feats at once: raising $12 million in funding and securing $800 million in liquidity support. What does this reflect? Finally, someone is stepping in to regulate the Ethereum block space trading market.

## Where Does the Money Come From

ETHGas's latest funding round was led by Polychain Capital, with participation from Stake Capital, BlueYard Capital, Lafayette Macro Advisors, SIG DT, and Amber Group. Interestingly, this isn't their first round of funding — founder Kevin Lepsoe revealed that they also secured about $5 million in undisclosed funding in mid-2024. The new round started in July and only concluded last month.

The funding was done via SAFT (Simple Agreement for Future Tokens), which did not grant board seats or advisory roles. Regarding valuation, Lepsoe declined to disclose any subsequent valuation information.

In addition to the $12 million in cash, there's something more valuable — a liquidity commitment of $800 from Ethereum validators, block builders, and relay nodes. But note, this isn't actual cash; it's a pledge from these participants to provide block space to support ETHGas's market operations. In exchange, they can earn more stable and predictable returns.

## What Are They Doing

ETHGas is building a block space futures market — simply put, allowing people to pre-book "space" within Ethereum blocks, rather than competing only after blocks are created.

What is Ethereum block space? It's the storage capacity within a block, which determines which transactions are included, their order, and the transaction fees. In traditional models, all these are decided at the moment the block is created. ETHGas changes this game — enabling validators to pre-commit to up to 64 future blocks (about 12.8 minutes of block space).

Lepsoe explained this concept with a comparison: "It's like oil or energy producers selling orders days, weeks, or even months in advance, or airlines and steel mills pre-purchasing capacity to ensure supply. Commodity futures markets exist for a reason — to reduce risk, increase transparency, eliminate monopolies, and so on."

Through ETHGas, validators can sell different types of block space commitments: full block presales, inclusion commitments (ensuring transactions enter specific blocks), execution commitments (fixed price when transactions enter the block), and multi-block commitments (buying multiple consecutive blocks or a one-minute window). This directly increases the MEV (Maximum Extractable Value) that validators can earn, significantly boosting Ethereum stakers' yields — which is why validators are eager to join ETHGas.

From the user perspective, traders, applications, and institutions can lock in Gas fees, pay transaction fees in advance, and thoroughly avoid the risk of Gas price surges.

## Who Needs This Most

Many traditional financial institutions and sovereign wealth funds have expressed strong interest in block space. As more RWA (Real-World Assets) flow into Ethereum, people are increasingly concerned about how block space will operate when hundreds of billions of dollars are on-chain.

Lepsoe mentioned they are already working with several DAM (Digital Asset Management) projects, but details cannot be disclosed yet. More information is expected to be released in January.

ETHGas's revenue model is straightforward — taking a 5% fee from block space futures trading, with plans to charge applications that require real-time settlement in the future.

## Will "Real-Time Ethereum" Arrive?

Lepsoe revealed that besides the futures market, ETHGas is working on a more aggressive project — dividing a block into hundreds of continuous segments, each 50-100 milliseconds long, which could boost Ethereum's execution speed by 100-200 times. Although this would almost eliminate MEV, automated market makers could earn an additional $200-300 million from arbitrage trading — almost in real-time.

Ethereum researcher Justin Drake has long advocated that pre-confirmation and real-time execution are crucial for improving user experience, and Vitalik Buterin has expressed similar views. ETHGas's concept of a "decentralized on-chain block space futures market" aligns with their philosophy.

Lepsoe said, "Once we achieve real-time Ethereum, MEV will disappear. This new development will compete with the current spot market based on MEV extraction. Although the technology has successfully run on mainnet, it has not yet been widely deployed. Full rollout is planned for Q1."

## How Is the Team

The ETHGas team consists of 18 members distributed across Asia, Europe, and the US, with about half based in Hong Kong. Lepsoe stated there are no current hiring plans. Interestingly, ETHGas spun off from Lepsoe's other project, Infinity Exchange — a fixed-income protocol that is currently paused.

Lepsoe revealed that ETHGas was born out of the need to address MEV risk and liquidation risk — two major issues that have long hindered institutional capital from flowing into on-chain trading. Now, with this $12 million funding and $800 million liquidity support, the project aims to change all that.