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TL,DR: We expect Glo transfers to cost 10-20% less gas than the equivalent transfer with USDC or USDT. The savings come from a more efficient method of checking whether a wallet is on Glo’s denylist. In real terms, transferring Glo should be about 4,000-7,000 gas cheaper on average; scaled up to the volume of a large stablecoin, this comes to millions of dollars saved per month.
How Glo cuts down on gas costs
When you hold Glo in your wallet, your account balance has a digit appended to it that tells the Glo smart contract whether your wallet is on Glo’s denylist or not. When a user initiates a Glo transfer from one wallet to another, the Glo smart contract reads both users’ account balances, and if the denylist value on either balance is a 1, e.g. ‘yes’, the transaction will be denied.
The conventional way for checking denylist status is to compare wallet addresses against a denylist at the point of transaction. This is a `read` operation on the blockchain, which costs gas. This is a separate operation from the `read` of users’ balances (to make sure, e.g., that they have enough currency to complete the transaction). Glo’s method, by contrast, performs a single `read` of the account balance that assesses both its viability and the wallet’s denylist status. One fewer operation means reduced computational complexity, which means lower gas costs.
How much gas will this save?
Relative to USDT and USDC, we estimate Glo's gas costs to be about 10-20% lower per transaction. This comes to about 6900 fewer gas than with USDC and about 4500 fewer than with USDT, on average.
How much is that in dollars?
As of this writing ($1500/ETH), 6900 gas comes to about 44c saved per transaction. Total savings will depend on the price of gas and the value of Ethereum, but for context, Alex Kroeger estimates that this change would have saved USDC users about $3.6M in December 2021.
A small difference repeated many times can become quite large.