Ethereum Gas Fees Explained
What Is A Gas Limit?
The gas limit refers to the maximum amount of gas you are willing to consume on a transaction. More complicated transactions involving smart contracts require more computational work, so they require a higher gas limit than a simple payment. A standard ETH transfer requires a gas limit of 21,000 units of gas.
For example, if you put a gas limit of 60,000 for a simple ETH transfer, the EVM (Ethereum Virtual Machine) would consume 25,000, and you would get back the remaining 35,000. However, if you specify too little gas, for example, a gas limit of 20,000 for a simple ETH transfer, the EVM (Ethereum Virtual Machine) will consume your 20,000 gas units attempting to fulfill the transaction, but it will not complete. The EVM (Ethereum Virtual Machine) then reverts any changes, but since the miner has already done 20k gas units worth of work, that gas is consumed.
WHY CAN GAS FEES GET SO HIGH?
Often we will see spikes in gas due to a big NFT drop taking place or if ETH-based altcoins are pumping. Performing any operation on Ethereum requires consuming gas, and gas space is limited per block. Fees include calculations, storing or manipulating data, or transferring tokens, consuming different amounts of “gas” units. If there’s too much demand, users must offer a higher tip amount to try and outbid other users’ transactions. A higher tip can make it more likely that your transaction will get into the next block.
Gas price alone does not actually determine how much we have to pay for a particular transaction. To calculate the transaction fee, we have to multiply the gas used by the transaction fee, which is measured in GWEI.
What Can I Do To Reduce Gas Costs?
When it comes to gas costs their are many factors that come into play. One such being the contract and how much of your gas limit it is actually using; this is something that is completely out of your control. Some things you can do to have an idea on what gas you should be using when minting an NFT would be having a website like https://www.blocknative.com/gas-estimator open or basing it off of the GWEI MetaMask is recommending you use. To reduce ETH lost on failed transactions you can try out Flashbots which is a enhancement to the Ethereum protocol that adds another layer for users to send their transaction directly to the miner instead of having it in the mempool which can indirectly limit the ETH you lose on failed transactions.
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