Gas Fee

What are Gas Fees?

Gas fees are transaction fees paid to network validators (miners or stakers) for processing transactions on a blockchain. The term originated with Ethereum, where “gas” refers to the computational effort required to execute operations.

How Gas Works on Ethereum

Components of Gas

Gas Units - The amount of computational work

• Simple transfer: ~21,000 gas
• Token swap: ~100,000-200,000 gas
• Complex DeFi: ~500,000+ gas

Gas Price - What you pay per unit (in Gwei)

• 1 Gwei = 0.000000001 ETH
• Prices fluctuate with network demand

Total Fee = Gas Units × Gas Price

Example Calculation

Simple transfer:
21,000 gas × 30 Gwei = 630,000 Gwei = 0.00063 ETH
At $3,000/ETH = $1.89 fee

Why Gas Fees Exist

1. Prevent Spam

• Fees make spam attacks expensive
• Protects network from abuse

2. Prioritize Transactions

• Higher fees = faster processing
• Market-based allocation

3. Compensate Validators

• Rewards for securing network
• Incentive to process transactions

Gas Fee Fluctuations

Fees vary based on:

Network Congestion

• More users = higher fees
• NFT drops cause spikes
• DeFi activity increases demand

Time of Day

• US trading hours typically busier
• Weekends often cheaper

Market Conditions

• Bull markets = more activity = higher fees
• Bear markets = lower activity = lower fees

Strategies to Reduce Gas

1. Time Your Transactions

• Check gas trackers (Etherscan Gas Tracker)
• Transact during low-activity periods
• Weekends often have lower fees

2. Use Layer 2 Solutions

• Arbitrum - Ethereum rollup
• Optimism - Optimistic rollup
• Polygon - Sidechain
• Fees often 90%+ cheaper

3. Set Gas Limits

• Don’t overpay
• Use recommended gas settings
• Avoid “fast” unless urgent

4. Batch Transactions

• Combine multiple operations
• One large transaction vs many small ones

Gas on Different Blockchains

Blockchain	Avg Fee	Speed
Ethereum	$1-20+	15 sec
Solana	Under $0.01	Under 1 sec
BNB Chain	$0.10-0.30	3 sec
Polygon	Under $0.01	2 sec
Arbitrum	$0.10-0.50	Under 1 sec

Exchange Withdrawal Fees

When withdrawing from exchanges like Binance, you pay:

• Network gas fee (varies by blockchain)
• Exchange markup (if any)

Always check withdrawal network options - choosing Arbitrum over Ethereum can save significantly on fees.