The first and most obvious thing you can do to avoid high fees is to wait it out. There are, however, more economic alternatives that you can try out. There is absolutely no way you can move your assets or execute a smart contract without paying them. Gas fees are inevitable if you have to operate in the Ethereum blockchain. Make sure you use Etherscan Gas Tracker to check the fees for each platform or token you’re using to avoid surprises and only pay amounts you’re comfortable with.įirst of all, let’s get one thing clear. The same goes for withdrawing assets from Metamask or Uniswap, Aave, and other DeFi platforms. Gas varies for transferring ETH than for USDC or any ERC20 tokens. Lastly, there is a different fee for each smart contract executed on the Ethereum blockchain. That means that if ETH price rises against the dollar, the dollar value of your Gas fee will also be greater. dollars or other fiat currency for clarification, fees are paid in ETH. As we said, although we often convert them to U.S. This, however, will improve when Ethereum fully migrates to ETH2.0 in Q4 2021 or Q1 2022, when the blockchain switches from Proof-of-Work to Proof-of-Stake validation.Īnother factor that affects Gas price is of course ETH value. When Miner A finishes, he will move on to transaction 5 and leave 1 and 2 again until no more transactions with higher fees appear or until 1 and 2 are rejected. However, while they were mining, a new transaction appeared willing to pay a 5 Gwei fee. One of them will win, and the other will move on to transaction 3. Miner A and miner B will compete to confirm transaction 4 first, as it will reward them with 4 Gwei. Let’s also say the transaction number is the Gwei they are willing to pay for the fee. Let’s put it this way: There are 2 miners (A and B) and 4 transactions (1, 2, 3, and 4) waiting for validation. That way, lower fee transactions are left last for confirmation, sometimes even rejected. Each user of the network can choose the Gas price they want to pay, but miners will always try to work on the higher fee transactions since their reward would be greater. On the other hand, people who need their assets moved immediately and can’t wait for validations may be willing to pay a higher fee to get it cleared ASAP. On one hand, miners can choose to reject transactions if they consider the Gas set for them isn’t worth the trouble. How did that happen? How does the network determine the exact amount we have to pay to perform a transaction? Well, fees on Ethereum respond to different factors.įirst of all, there’s supply and demand. We’ve said earlier that fees have never been higher. In other words, you could say Gas is the fuel that allows the Ethereum blockchain to work. Without confirmations, transactions wouldn’t go through. If there was no Gas, there would be no rewards for miners and therefore no reason for them to provide confirmations to the blockchain. You pay Gas for every single transaction you perform, but you may wonder… to whom? Who receives that payment? That would be miners, responsible for validating those transactions and keeping the network secure and transparent. For example, You could say Gas is 0.000000010 ETH, but it’s much easier to say it’s 10 Gwei. To be extremely clear, 1 ETH equals 1.000.000.000 Gwei, making it the best unit to determine Gas prices. These fees are specified in Gwei (also called nanoether), which is a special denomination for a fraction of Ether (ETH), the native cryptocurrency of the Ethereum blockchain. Gas is the name given to the fees you have to pay every time you perform a transaction in the Ethereum network, whether you’re buying, selling, or moving cryptocurrency from wallet to wallet. However, these fees are necessary to keep the network’s performance optimum. Ethereum fees have literally never been higher and the cost of moving your assets can take up a good amount of your budget, making you question if it’s actually worth it. If you’ve been operating in the Ethereum blockchain, there’s a good chance you felt like ripping the hair off your head these last few days, especially if you’re a retail investor.
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