How To Save Gas On Ethereum Blockchain?
Save your expenses in the middle of buying NFTs, swaps, & protocols
Like any network, Ethereum needs fuel for its operation. As ETH gains popularity among decentralized applications and finance, its demand increases exponentially with users.
Gas fees(Ethereum) are paid for executing transactions on the ETH network. Like sending tokens to an address, swapping for another token, minting an NFT, etc…
Do you remember? There have been instances where people used to pay 10x the gas fee than the actual price of NFTs.
For example, one user purchased a $25 NFT for the total price of $3,325 (Including gas fee) That’s $3,300 just in fees.
Well, there is a way to tackle this!
So, How Is The Gas Fee Determined And Calculated?
It is the demand and supply. If there is great pressure for Ethereum transactions, then miners would demand a higher fee to process it and vice versa.
Gas Fee calculation
The price of gas is denoted in gwei (giga wei). Wei is the smallest fraction of an ether, i.e. 1 ether equals 1,000,000,000,000,000,000 wei, so 1 gwei is 1,000,000,000 (1 billion) wei or 0.000000001 ETH
This Ethereum’s gas fee structure is brought in by London upgrade. The total fee is now calculated as:
Total Fee = Gas unit (limits) * (Base fee + Tip)
Gas units (limits): This refers to the maximum amount of gas you are willing to spend on a transaction.
- Base fee — This refers to the minimum amount of gas required to include a transaction on the Ethereum blockchain
- Tips: Also known as a priority fee, tips are an additional fee made to have your transaction complete faster
Hence, before signing any transaction, know the backend process of the Gas Fee structure to not get rekt.
Ethereum’s Fame & Use Cases
Be it finance or DApps, supply chain management, trading non-fungible tokens (NFTs), or fundraising — Developers and startups prefer using Ethereum. The platform has also been the launchpad for decentralized autonomous organizations (DAOs) and initial dex offerings (IDOs)
Only after the rise of DeFi applications, the Ethereum gas fee reached an all-time high. Investors or whales who are looking to make large returns on their passive capital are willing to pay prohibitively high gas costs to make sure their transactions happen.
Digital collectibles AKA Jpegs also play an important role in surging ETH fees. The popularity of NFTs got initiated in the Ethereum blockchain which attracted many artists and creators to mint in this blockchain.
Let’s find out how we can avoid such elevated fuel in the blockchain!
How to avoid such high gas fees?
- Spot the right time
To reduce the cost of your overall gas fee is through setting a lower base and tip fee. You could make your transaction on the network at a time when fewer people are using the blockchain. Interact when there isn’t any commotion. If you can find a time where there is less demand to interact with the Ethereum network, you could spend less on gas by reducing the base fee of your transaction. Weekends are usually the best time for that.
People could watch the gas tracker here — https://etherscan.io/gastracker and take action when there is less gwei at a particular time.
2. Set a max fee limit on your transaction
Another way to spend less on gas fees is to set a maximum gas fee limit on your transaction. Setting a max fee for gas is a way of telling the Ethereum blockchain that X amount of gwei is the most you are willing to spend. Once the transaction is completed, the Ethereum network will refund the remainder of the max fee that wasn’t used as part of your total gas fee.
3. Layer 2 scaling solutions
Layer 2 scaling solutions are off-chain, meaning they handle transactions separately from the Ethereum blockchain. They increase the speed of transactions processed per second. Layer 2 transactions occur off-chain and then are verified by the Ethereum network and recorded on-chain.
Some popular examples include Polygon, Arbitrum, Loopring, and dYdX.
Save A Dime At No Time ⛽
High ETH gas prices aren’t a permanent concern. With the advent of layer 2 scaling solutions and the upcoming ETH upgrades, these prices will come down considerably in the coming year.
Hence, before performing an Ethereum transaction, don’t just go mindlessly do it. Check what time of day it is, or if you can do the same transaction on a scaling solution, and so forth. You can save yourself a lot of funds just by being strategic in how you approach gas!
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