Gas Tutorial: How to Set Your Own Gas Prices

What exactly is gas?

The name “gas” came as an analogy from actual gas for a car, and the concept is very similar. If you were to drive to a different city and simulate the total cost for gas, 2 things you will need to think of is distance and price per gallon/liter of gas (assuming you always use the same car so MPG stays the same). The total gas price will be higher if: 1. you are traveling a longer distance, or 2. the gas price is higher.

How to manually set a gas price

Let’s try placing a bid on some art on Foundation. Once you hit the “Place a bid” button, the Metamask Chrome extension pops up (I am assuming you already have the Metamask extension) and you will see this screen:

  • Gas Limit (unit) : The maximum units of gas you are willing to use for this transaction. Units of gas are multiplied by the “Max fee” to equal your total overall gas price, just like with a car, the number of gallons of gas you use is multiplied by the price per gallon of gas to calculate your total cost for a trip. Never change this value because this is the amount of work it requires to complete the transaction, and just like you can’t change the distance it takes to drive from California to New York, you can’t change how much work a certain transaction requires. (Remember the simplest transaction, sending money from one address to another takes 21,000 units of gas, so you can see placing a bid on Foundation takes a lot more work (~72,600 units [which includes some margin of error in estimation, so in reality it’s slightly less]).
  • Max priority fee aka “miner tip” (GWEI): This goes directly to the Ethereum miners (people who secure the blockchain and process transactions) and incentivizes them to prioritize your transaction over others. Miners, who are the ones that select which transactions they are going to process, will prioritize the transaction they process based on the miner tip, because that’s the revenue they are going to earn. Therefore, making this higher will incentivizes miners to pick your transaction. Typically, however, you don’t need to really make this anything higher than 1.5 gwei, so no need to change this.
  • Max fee(GWEI): The maximum amount you’ll pay (base fee + priority fee). The base fee is a predetermined amount set by the Ethereum blockchain as the minimum required fee (this fee is burned and doesn’t go to miners) for any transaction to be processed in a given block on the blockchain. If your base fee you set for your transaction is below the base fee required for a given block, no matter how high your priority fee is, it will not be processed by that block.

How to pick the right gas price to set

At this point, you might be wondering, ok, so I understand that a good gas price to set is 35 or 40 as of right now in September 2021, but the congestion and gas prices of Ethereum fluctuate all the time, so how can I pick the right gas price on my own in the future?

How does the blockchain know which transactions to process?

When you speed up a transaction, you will see multiple pending transactions on Etherscan.

Hack: How to replace a transaction with a completely new one

This might not be relevant to everyone because this is a more specific, advanced situation you may or may not encounter: Replacing the transaction with another transaction. Here’s one example case: you tried to buy a piece of art, placed a bid, and set the gas price to be lower so that it will go through later and not immediately. 5 minutes later, you found another art piece you like a lot more. You want to place a bid for the new art rather than the art you have already placed a bid on. Good news is you can, if the previous transaction hasn’t gone through yet. This is another benefit of setting low gas prices — you can cancel the transaction or replace it if you change your mind later!

One more thing before you go

The gas price on Ethereum fluctuate a lot nowadays, and the reason why the gas price goes up is because more people are making transactions at the same time. If you want to know what is going on, one way to know is by using icy.tools. This tools displays what NFT project is trending in the past hour (you can even see what’s been trending in the past 15 min if you pay for premium (0.03 ETH/mo)), so you get some idea of what people are aping into. Pretty neat tool :).

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Maï Akiyoshï

Maï Akiyoshï

CEO/co-founder of Curious Addys(https://www.curiousaddys.com/), the first educational NFT project that teaches you everything about crypto and NFTs.