LlamaNodes for Web3 Users
Gas Price Vs. Gas Limit
A class about gas for Llamas!
If you’re an experienced Llama, you might have heard the terms “gas price” and “gas limit” being used frequently. These terms are related to the way transactions are processed on the blockchain network and are important to understand if you’re planning to use our RPC services. Why not give you a refresher on how they work?
Gas Price:
In the context of cryptocurrencies, gas price refers to the fee that you need to pay for your transaction to be processed on the blockchain network. This fee is paid in the form of a cryptocurrency called Ether (ETH) on the Ethereum network, and it is denominated in a unit called “gwei.” The gas price is determined by market demand and supply, and it can vary depending on the network’s congestion level.
When does it matter?
If you are doing something that is time sensitive — like a trade — you want to have high gas.
Gas Limit:
Gas limit refers to the maximum amount of gas that can be used to process a transaction on the blockchain network. Each operation in a smart contract requires a specific amount of gas, and the total gas consumed by a transaction is the sum of the gas required for all the operations performed in the transaction.
Gas limits are generally automatically detected correctly by your web 3 wallet, but there’s some edge cases with how they are calculated that can be underestimated. An example being, after we had some users with the estimated gas limits from LlamaNodes RPCs being too low, we added a buffer to every estimate request that goes through us.
When does it matter?
If you are doing something and it fails with “revert: out of gas”, you want to increase the gas limit. changing the gas price here just means wasting more money — too many users send multiple transactions without enough gas limit, but with higher and higher gas prices — wasting your hard earned ETH!
Think of it like this…
To understand the difference between gas price and gas limit, you can think of a gas station. The gas price is like the cost per gallon of fuel, while the gas limit is like the maximum number of gallons that can be pumped into the car’s tank. The gas price determines how much you pay for each unit of gas, while the gas limit determines the maximum amount of gas that you can use.
Time for Review!
In summary, gas price and gas limit are both important factors that determine the cost and speed of processing a transaction on a blockchain network. A higher gas price will result in a faster confirmation time, but it will also cost more, while a higher gas limit will allow more complex transactions to be executed, but it may also increase the risk of errors or failures. Therefore, it’s essential to understand these concepts and choose the appropriate gas price and gas limit for your transaction to ensure its successful processing on the blockchain network.
