Gas fees explained, and how to pay less

What gas is

Every action on a blockchain, such as sending a token, swapping or depositing, uses computing work. Gas measures that work, and the gas fee is what you pay the network to process it. It is paid in the chain’s own coin: ETH on Ethereum and most of its layer 2s, POL on Polygon, SOL on Solana, and so on.

That’s why you always need a little of the gas coin in your wallet, even if you only want to move a stablecoin.

How the price is worked out (Ethereum)

Fee = gas used × price per unit of gas. The price is quoted in gwei; 1 gwei is one billionth of an ETH (0.000000001 ETH).

• A simple ETH transfer uses 21,000 gas. Token sends and swaps use more.
• Since the EIP-1559 upgrade, each block has a base fee that rises and falls with demand and is burned, plus an optional priority fee (tip) for the validator.
• At a 10 gwei price, an ETH transfer costs 21,000 × 10 gwei = 0.00021 ETH.

The gas tracker does this maths live for several chains, in dollars.

Layer 2s: the biggest saving

Layer 2 networks such as Base, Arbitrum and OP Mainnet bundle many transactions and settle them on Ethereum, so each one costs far less. Since the Dencun upgrade in March 2024 (EIP-4844), their fees have generally been a small fraction of Ethereum’s. Many of the same apps and stablecoins are available on them.

To use one, you move funds there with a bridge, or withdraw from an exchange directly to that network if it supports it. Bridges are another set of smart contracts with their own risks, so use well-known ones and check you’re on the right site.

More ways to save

• Pick your moment. Fees rise when the network is busy and fall when it’s quiet. Check before you act.
• Don’t overpay the tip. Your wallet’s standard setting is usually fine unless you’re in a hurry.
• Do fewer, bigger transactions instead of many small ones.
• Match fees to the amount. Paying a few dollars in gas to earn interest on a small deposit can wipe out the gain.