diff --git a/tools/walletextension/cache/RistrettoCache.go b/tools/walletextension/cache/RistrettoCache.go
new file mode 100644
index 0000000000..af417115b7
--- /dev/null
+++ b/tools/walletextension/cache/RistrettoCache.go
@@ -0,0 +1,82 @@
+package cache
+
+import (
+	"time"
+
+	"github.com/ethereum/go-ethereum/log"
+
+	"github.com/dgraph-io/ristretto"
+)
+
+const (
+	numCounters  = 1e7     // number of keys to track frequency of (10M).
+	maxCost      = 1 << 30 // maximum cost of cache (1GB).
+	bufferItems  = 64      // number of keys per Get buffer.
+	defaultConst = 1       // default cost of cache.
+)
+
+type RistrettoCache struct {
+	cache *ristretto.Cache
+	quit  chan struct{}
+}
+
+// NewRistrettoCache returns a new RistrettoCache.
+func NewRistrettoCache(logger log.Logger) (*RistrettoCache, error) {
+	cache, err := ristretto.NewCache(&ristretto.Config{
+		NumCounters: numCounters,
+		MaxCost:     maxCost,
+		BufferItems: bufferItems,
+		Metrics:     true,
+	})
+	if err != nil {
+		return nil, err
+	}
+
+	c := &RistrettoCache{
+		cache: cache,
+		quit:  make(chan struct{}),
+	}
+
+	// Start the metrics logging
+	go c.startMetricsLogging(logger)
+
+	return c, nil
+}
+
+// Set adds the key and value to the cache.
+func (c *RistrettoCache) Set(key string, value map[string]interface{}, ttl time.Duration) bool {
+	return c.cache.SetWithTTL(key, value, defaultConst, ttl)
+}
+
+// Get returns the value for the given key if it exists.
+func (c *RistrettoCache) Get(key string) (value map[string]interface{}, ok bool) {
+	item, found := c.cache.Get(key)
+	if !found {
+		return nil, false
+	}
+
+	// Assuming the item is stored as a map[string]interface{}, otherwise you need to type assert to the correct type.
+	value, ok = item.(map[string]interface{})
+	if !ok {
+		// The item isn't of type map[string]interface{}
+		return nil, false
+	}
+
+	return value, true
+}
+
+// startMetricsLogging starts logging cache metrics every hour.
+func (c *RistrettoCache) startMetricsLogging(logger log.Logger) {
+	ticker := time.NewTicker(1 * time.Hour)
+	for {
+		select {
+		case <-ticker.C:
+			metrics := c.cache.Metrics
+			logger.Info("Cache metrics: Hits: %d, Misses: %d, Cost Added: %d\n",
+				metrics.Hits(), metrics.Misses(), metrics.CostAdded())
+		case <-c.quit:
+			ticker.Stop()
+			return
+		}
+	}
+}
diff --git a/tools/walletextension/cache/cache.go b/tools/walletextension/cache/cache.go
new file mode 100644
index 0000000000..66e8b35f63
--- /dev/null
+++ b/tools/walletextension/cache/cache.go
@@ -0,0 +1,98 @@
+package cache
+
+import (
+	"crypto/sha256"
+	"encoding/json"
+	"fmt"
+	"time"
+
+	"github.com/ethereum/go-ethereum/log"
+
+	"github.com/ten-protocol/go-ten/tools/walletextension/common"
+)
+
+const (
+	longCacheTTL  = 5 * time.Hour
+	shortCacheTTL = 1 * time.Second
+)
+
+// CacheableRPCMethods is a map of Ethereum JSON-RPC methods that can be cached and their TTL
+var cacheableRPCMethods = map[string]time.Duration{
+	// Ethereum JSON-RPC methods that can be cached long time
+	"eth_getBlockByNumber":     longCacheTTL,
+	"eth_getBlockByHash":       longCacheTTL,
+	"eth_getTransactionByHash": longCacheTTL,
+	"eth_chainId":              longCacheTTL,
+
+	// Ethereum JSON-RPC methods that can be cached short time
+	"eth_blockNumber":           shortCacheTTL,
+	"eth_getCode":               shortCacheTTL,
+	"eth_getBalance":            shortCacheTTL,
+	"eth_getTransactionReceipt": shortCacheTTL,
+	"eth_call":                  shortCacheTTL,
+	"eth_gasPrice":              shortCacheTTL,
+	"eth_getTransactionCount":   shortCacheTTL,
+	"eth_estimateGas":           shortCacheTTL,
+	"eth_feeHistory":            shortCacheTTL,
+}
+
+type Cache interface {
+	Set(key string, value map[string]interface{}, ttl time.Duration) bool
+	Get(key string) (value map[string]interface{}, ok bool)
+}
+
+func NewCache(logger log.Logger) (Cache, error) {
+	return NewRistrettoCache(logger)
+}
+
+// IsCacheable checks if the given RPC request is cacheable and returns the cache key and TTL
+func IsCacheable(key *common.RPCRequest) (bool, string, time.Duration) {
+	if key == nil || key.Method == "" {
+		return false, "", 0
+	}
+
+	// Check if the method is cacheable
+	ttl, isCacheable := cacheableRPCMethods[key.Method]
+
+	if isCacheable {
+		// method is cacheable - select cache key
+		switch key.Method {
+		case "eth_getCode", "eth_getBalance", "eth_getTransactionCount", "eth_estimateGas", "eth_call":
+			if len(key.Params) == 1 || len(key.Params) == 2 && (key.Params[1] == "latest" || key.Params[1] == "pending") {
+				return true, GenerateCacheKey(key.Method, key.Params...), ttl
+			}
+			// in this case, we have a fixed block number, and we can cache the result for a long time
+			return true, GenerateCacheKey(key.Method, key.Params...), longCacheTTL
+		case "eth_feeHistory":
+			if len(key.Params) == 2 || len(key.Params) == 3 && (key.Params[2] == "latest" || key.Params[2] == "pending") {
+				return true, GenerateCacheKey(key.Method, key.Params...), ttl
+			}
+			// in this case, we have a fixed block number, and we can cache the result for a long time
+			return true, GenerateCacheKey(key.Method, key.Params...), longCacheTTL
+		default:
+			return true, GenerateCacheKey(key.Method, key.Params...), ttl
+		}
+	}
+
+	// method is not cacheable
+	return false, "", 0
+}
+
+// GenerateCacheKey generates a cache key for the given method and parameters
+func GenerateCacheKey(method string, params ...interface{}) string {
+	// Serialize parameters
+	paramBytes, err := json.Marshal(params)
+	if err != nil {
+		return ""
+	}
+
+	// Concatenate method name and parameters
+	rawKey := method + string(paramBytes)
+
+	// Optional: Apply hashing
+	hasher := sha256.New()
+	hasher.Write([]byte(rawKey))
+	hashedKey := fmt.Sprintf("%x", hasher.Sum(nil))
+
+	return hashedKey
+}
diff --git a/tools/walletextension/cache/cache_test.go b/tools/walletextension/cache/cache_test.go
new file mode 100644
index 0000000000..f4bb05d941
--- /dev/null
+++ b/tools/walletextension/cache/cache_test.go
@@ -0,0 +1,147 @@
+package cache
+
+import (
+	"reflect"
+	"testing"
+	"time"
+
+	"github.com/ethereum/go-ethereum/log"
+
+	"github.com/ten-protocol/go-ten/tools/walletextension/common"
+)
+
+var tests = map[string]func(t *testing.T){
+	"testCacheableMethods":                    testCacheableMethods,
+	"testNonCacheableMethods":                 testNonCacheableMethods,
+	"testMethodsWithLatestOrPendingParameter": testMethodsWithLatestOrPendingParameter,
+}
+
+var cacheTests = map[string]func(cache Cache, t *testing.T){
+	"testResultsAreCached": testResultsAreCached,
+	"testCacheTTL":         testCacheTTL,
+}
+
+var nonCacheableMethods = []string{"eth_sendrawtransaction", "eth_sendtransaction", "join", "authenticate"}
+
+func TestGatewayCaching(t *testing.T) {
+	for name, test := range tests {
+		t.Run(name, func(t *testing.T) {
+			test(t)
+		})
+	}
+
+	// cache tests
+	for name, test := range cacheTests {
+		t.Run(name, func(t *testing.T) {
+			logger := log.New()
+			cache, err := NewCache(logger)
+			if err != nil {
+				t.Errorf("failed to create cache: %v", err)
+			}
+			test(cache, t)
+		})
+	}
+}
+
+// testCacheableMethods tests if the cacheable methods are cacheable
+func testCacheableMethods(t *testing.T) {
+	for method := range cacheableRPCMethods {
+		key := &common.RPCRequest{Method: method}
+		isCacheable, _, _ := IsCacheable(key)
+		if isCacheable != true {
+			t.Errorf("method %s should be cacheable", method)
+		}
+	}
+}
+
+// testNonCacheableMethods tests if the non-cacheable methods are not cacheable
+func testNonCacheableMethods(t *testing.T) {
+	for _, method := range nonCacheableMethods {
+		key := &common.RPCRequest{Method: method}
+		isCacheable, _, _ := IsCacheable(key)
+		if isCacheable == true {
+			t.Errorf("method %s should not be cacheable", method)
+		}
+	}
+}
+
+// testMethodsWithLatestOrPendingParameter tests if the methods with latest or pending parameter are cacheable
+func testMethodsWithLatestOrPendingParameter(t *testing.T) {
+	methods := []string{"eth_getCode", "eth_getBalance", "eth_getTransactionCount", "eth_estimateGas", "eth_call"}
+	for _, method := range methods {
+		key := &common.RPCRequest{Method: method, Params: []interface{}{"0x123", "latest"}}
+		_, _, ttl := IsCacheable(key)
+		if ttl != shortCacheTTL {
+			t.Errorf("method %s with latest parameter should have TTL of %s, but %s received", method, shortCacheTTL, ttl)
+		}
+
+		key = &common.RPCRequest{Method: method, Params: []interface{}{"0x123", "pending"}}
+		_, _, ttl = IsCacheable(key)
+		if ttl != shortCacheTTL {
+			t.Errorf("method %s with pending parameter should have TTL of %s, but %s received", method, shortCacheTTL, ttl)
+		}
+	}
+}
+
+// testResultsAreCached tests if the results are cached as expected
+func testResultsAreCached(cache Cache, t *testing.T) {
+	// prepare a cacheable request and imaginary response
+	req := &common.RPCRequest{Method: "eth_getBlockByNumber", Params: []interface{}{"0x123"}}
+	res := map[string]interface{}{"result": "block"}
+	isCacheable, key, ttl := IsCacheable(req)
+	if !isCacheable {
+		t.Errorf("method %s should be cacheable", req.Method)
+	}
+	// set the response in the cache with a TTL
+	if !cache.Set(key, res, ttl) {
+		t.Errorf("failed to set value in cache for %s", req)
+	}
+
+	time.Sleep(50 * time.Millisecond) // wait for the cache to be set
+	value, ok := cache.Get(key)
+	if !ok {
+		t.Errorf("failed to get cached value for %s", req)
+	}
+
+	if !reflect.DeepEqual(value, res) {
+		t.Errorf("expected %v, got %v", res, value)
+	}
+}
+
+// testCacheTTL tests if the cache TTL is working as expected
+func testCacheTTL(cache Cache, t *testing.T) {
+	req := &common.RPCRequest{Method: "eth_getBalance", Params: []interface{}{"0x123"}}
+	res := map[string]interface{}{"result": "100"}
+	isCacheable, key, ttl := IsCacheable(req)
+
+	if !isCacheable {
+		t.Errorf("method %s should be cacheable", req.Method)
+	}
+
+	if ttl != shortCacheTTL {
+		t.Errorf("method %s should have TTL of %s, but %s received", req.Method, shortCacheTTL, ttl)
+	}
+
+	// set the response in the cache with a TTL
+	if !cache.Set(key, res, ttl) {
+		t.Errorf("failed to set value in cache for %s", req)
+	}
+	time.Sleep(50 * time.Millisecond) // wait for the cache to be set
+
+	// check if the value is in the cache
+	value, ok := cache.Get(key)
+	if !ok {
+		t.Errorf("failed to get cached value for %s", req)
+	}
+
+	if !reflect.DeepEqual(value, res) {
+		t.Errorf("expected %v, got %v", res, value)
+	}
+
+	// sleep for the TTL to expire
+	time.Sleep(shortCacheTTL + 100*time.Millisecond)
+	_, ok = cache.Get(key)
+	if ok {
+		t.Errorf("value should not be in the cache after TTL")
+	}
+}
diff --git a/tools/walletextension/wallet_extension.go b/tools/walletextension/wallet_extension.go
index 237e79c980..68f2917ab0 100644
--- a/tools/walletextension/wallet_extension.go
+++ b/tools/walletextension/wallet_extension.go
@@ -7,6 +7,8 @@ import (
 	"fmt"
 	"time"
 
+	"github.com/ten-protocol/go-ten/tools/walletextension/cache"
+
 	"github.com/ten-protocol/go-ten/tools/walletextension/accountmanager"
 
 	"github.com/ten-protocol/go-ten/tools/walletextension/config"
@@ -43,6 +45,7 @@ type WalletExtension struct {
 	version            string
 	config             *config.Config
 	tenClient          *obsclient.ObsClient
+	cache              cache.Cache
 }
 
 func New(
@@ -62,6 +65,12 @@ func New(
 	}
 	newTenClient := obsclient.NewObsClient(rpcClient)
 	newFileLogger := common.NewFileLogger()
+	newGatewayCache, err := cache.NewCache(logger)
+	if err != nil {
+		logger.Error(fmt.Errorf("could not create cache. Cause: %w", err).Error())
+		panic(err)
+	}
+
 	return &WalletExtension{
 		hostAddrHTTP:       hostAddrHTTP,
 		hostAddrWS:         hostAddrWS,
@@ -74,6 +83,7 @@ func New(
 		version:            version,
 		config:             config,
 		tenClient:          newTenClient,
+		cache:              newGatewayCache,
 	}
 }
 
@@ -92,6 +102,19 @@ func (w *WalletExtension) ProxyEthRequest(request *common.RPCRequest, conn userc
 	// start measuring time for request
 	requestStartTime := time.Now()
 
+	// Check if the request is in the cache
+	isCacheable, key, ttl := cache.IsCacheable(request)
+
+	// in case of cache hit return the response from the cache
+	if isCacheable {
+		if value, ok := w.cache.Get(key); ok {
+			requestEndTime := time.Now()
+			duration := requestEndTime.Sub(requestStartTime)
+			w.fileLogger.Info(fmt.Sprintf("Request method: %s, request params: %s, encryptionToken of sender: %s, response: %s, duration: %d ", request.Method, request.Params, hexUserID, value, duration.Milliseconds()))
+			return value, nil
+		}
+	}
+
 	response := map[string]interface{}{}
 	// all responses must contain the request id. Both successful and unsuccessful.
 	response[common.JSONKeyRPCVersion] = jsonrpc.Version
@@ -140,6 +163,11 @@ func (w *WalletExtension) ProxyEthRequest(request *common.RPCRequest, conn userc
 	duration := requestEndTime.Sub(requestStartTime)
 	w.fileLogger.Info(fmt.Sprintf("Request method: %s, request params: %s, encryptionToken of sender: %s, response: %s, duration: %d ", request.Method, request.Params, hexUserID, response, duration.Milliseconds()))
 
+	// if the request is cacheable, store the response in the cache
+	if isCacheable {
+		w.cache.Set(key, response, ttl)
+	}
+
 	return response, nil
 }