ENO Network
XSmartLink
  • Welcome to ENO Network👋
    • ENO Academy!💼
    • 🍷 The Story of ENO
  • OVERVIEW
    • 🎓​What do we do?
    • ⭐Why do we do it?
    • 🪙ENO Network Economy
    • 🚀How to Get Started?
    • 📞Contact Us
  • Products
    • 🎨 ENO Creator
    • 🛒 ENO Marketplace
    • 🤖 Agnes AI
  • 🤓ENO Academy
    • How to...
      • How to create a Creator profile?
      • How to add widgets to your creator profile?
      • How to Create a Collection?
      • How to Buy an NFT on ENO Marketplace
      • How to Create an NFT on ENO Marketplace?
      • How to Selling An NFT on the ENO Second Market?
      • How to Make an Offer on an NFT in the Second Market?
    • Blockchain Education
      • What is a Crypto Wallet?
      • What is an NFT?
      • What is Cryptocurrency?
      • Blockchain Gas Fees Explained
      • Staying Safe in Web3
      • What is Blockchain?
      • What is Web3?
  • 🗺️Roadmap
  • Terms and Conditions
    • Access to the Services
    • Ownership
    • License To Access And Use Our Service And Content
    • Third Party Content, Agreements, And Services
    • User Conduct
    • Intellectual Property Rights
    • Communication Preferences
    • Indemnification
    • Disclaimers
    • Assumption Of Risk
    • Limitation Of Liability
    • Data Protection
    • Modifications To The Service
    • Termination
    • Severability
    • Injunctive Relief
    • Survival
    • Miscellaneous
  • Privacy Policy
  • Cookie Policy
Powered by GitBook
On this page
  • What Are Blockchain Gas Fees?
  • Why Do Gas Fees Exist?
  • How Gas Fees Work: The Technical Details
  • Gas Fees Across Different Blockchains
  • Why Gas Fees Fluctuate
  • The Real-World Impact of Gas Fees
  • Strategies to Reduce Your Gas Fees
  • Common Questions About Gas Fees
  • Gas Fees and ENO: A Smoother Experience
  • Conclusion: Navigating the World of Gas Fees
  1. 🤓ENO Academy
  2. Blockchain Education

Blockchain Gas Fees Explained

If you've dipped your toes into the world of cryptocurrencies and NFTs, you've likely encountered the term "gas fees" – often when you were surprised by an unexpectedly high transaction cost. These fees are a crucial part of how blockchain networks operate, but they can be confusing and frustrating for newcomers. This guide will break down exactly what gas fees are, why they exist, and most importantly, how to minimize them.

What Are Blockchain Gas Fees?

Gas fees are payments made by users to compensate for the computing energy required to process and validate transactions on a blockchain. Think of them as the "processing fees" of the blockchain world.

The term "gas" is a metaphor – just as gasoline fuels your car's engine, computational "gas" fuels operations on the blockchain. The more complex the operation (like creating an NFT or executing a smart contract), the more gas it requires.

Gas Fees: A Simple Analogy

Imagine a busy highway where every car represents a transaction:

  • The highway is the blockchain

  • Cars are transactions waiting to be processed

  • Toll booths are where miners/validators process transactions

  • Toll fees are the gas fees you pay

  • Express lanes are available for those willing to pay higher fees

During rush hour (high network congestion), toll prices increase. Those willing to pay more get to use express lanes, while others wait longer in regular lanes.

Why Do Gas Fees Exist?

Gas fees serve several essential purposes in blockchain ecosystems:

1. Compensation for Validators

When you submit a transaction, computers around the world (nodes) must use their computational resources to validate and record it on the blockchain. Gas fees compensate these validators for their work and the electricity they consume.

2. Network Security

Gas fees help protect blockchain networks from spam and denial-of-service attacks. If transactions were free, someone could overwhelm the network with millions of tiny transactions, bringing the system to a halt. By attaching a cost to each transaction, this type of attack becomes prohibitively expensive.

3. Resource Allocation

Blockchains have limited capacity for processing transactions. Gas fees create a market mechanism that allocates this scarce resource efficiently. When the network is congested, prices rise, prioritizing transactions from users who value speed more highly.

How Gas Fees Work: The Technical Details

Understanding the mechanics of gas fees helps you navigate them more effectively:

The Components of Gas Fees

On Ethereum and similar blockchains, gas fees have two main components:

  1. Gas limit: The maximum amount of computational work you're willing to pay for

  2. Gas price: How much you're willing to pay per unit of gas

Your total fee is calculated as: Gas limit × Gas price = Total gas fee

Gas Units and Complexity

Different operations require different amounts of computational work:

  • Simple transfer of ETH: ~21,000 gas units

  • Approving a token for trading: ~45,000 gas units

  • Minting an NFT: ~150,000+ gas units

  • Complex smart contract interactions: Can exceed 1,000,000 gas units

Base Fee and Priority Fee (Post-EIP-1559)

On Ethereum after the London upgrade (EIP-1559), gas fees consist of:

  • Base fee: Automatically calculated by the network based on demand; this portion is "burned" (removed from circulation)

  • Priority fee: An optional tip to validators to incentivize them to process your transaction faster

The total is: (Base fee + Priority fee) × Gas units = Total gas fee

Gas Fees Across Different Blockchains

Not all blockchain networks handle fees the same way:

Ethereum

The original smart contract platform typically has the highest gas fees due to its popularity and limited throughput (transactions per second). Fees can range from a few dollars to hundreds of dollars during peak times.

Ethereum Layer 2 Solutions

Solutions built on top of Ethereum, like Arbitrum, Optimism, and zkSync, offer significantly lower fees by batching transactions:

  • Arbitrum: Typically 5-10x cheaper than Ethereum

  • Optimism: Similar savings to Arbitrum

  • zkSync: Can offer even greater savings in some cases

Alternative Blockchains

Many newer blockchains were designed with fee efficiency in mind:

  • Solana: Fees typically less than $0.01 per transaction

  • Polygon: Usually under $0.10 per transaction

  • Binance Smart Chain: Typically under $0.50 per transaction

Why Gas Fees Fluctuate

Gas fees are notoriously volatile. Understanding why helps you plan your transactions better:

Network Congestion

The primary factor affecting gas prices is simply supply and demand. When many people are trying to use the blockchain simultaneously, validators can charge more for their services.

Peak congestion often occurs during:

  • Popular NFT drops

  • Major market movements (bull runs or crashes)

  • Launch of high-profile projects

  • Times of day when global usage overlaps

Complexity of Transactions

As mentioned earlier, more complex operations require more computational resources, resulting in higher fees. For example:

  • Sending 10 ETH costs the same gas as sending 0.01 ETH (the amount doesn't affect complexity)

  • Swapping tokens on a decentralized exchange costs more than simply transferring tokens

  • First-time interactions with contracts (like approving a token) cost more than subsequent interactions

Base Currency Value

Gas fees are typically denominated in the blockchain's native currency. If the value of that currency increases relative to fiat (USD, EUR, etc.), the fiat-equivalent cost of gas also increases, even if the actual gas price remains stable.

The Real-World Impact of Gas Fees

Gas fees have significant implications for how blockchain technology is used:

Economic Barriers to Entry

High gas fees can price out users with less capital, particularly in developing economies. A $50 fee might be manageable for someone in the United States but prohibitive for someone in many other parts of the world.

Changing User Behavior

Users adapt their behavior to minimize gas costs:

  • Batching transactions (doing multiple operations at once)

  • Transacting during "off-peak" hours

  • Moving to layer 2 solutions or alternative blockchains

  • Setting up alerts for when gas prices drop below certain thresholds

Market Segmentation

Different use cases migrate to different blockchains based on fee structures:

  • High-value transactions remain on Ethereum despite high fees

  • Gaming and smaller transactions move to more scalable alternatives

  • Institutional transactions may prioritize security over cost

Strategies to Reduce Your Gas Fees

Now for the practical advice you've been waiting for – how to pay less in gas fees:

1. Time Your Transactions

Gas prices follow predictable patterns:

  • Weekends typically have lower fees than weekdays

  • Early mornings (Eastern Time) often have lower fees than afternoons

  • Avoiding major NFT drops or token launches can save substantially

Several tools can help you track gas prices and alert you when they drop:

  • Etherscan's Gas Tracker

  • Gas Now

  • Blocknative Gas Estimator

2. Use Layer 2 Solutions

Layer 2 networks like Arbitrum (which ENO uses) process transactions more efficiently while inheriting Ethereum's security:

  • Moving assets to Layer 2 requires an initial (sometimes costly) transaction

  • Once there, transactions cost a fraction of Layer 1 fees

  • Consider making this move during low gas periods

3. Set Appropriate Gas Limits

Setting gas limits too high wastes money, while setting them too low causes transactions to fail (and you still pay for the attempt):

  • Most wallets set reasonable defaults based on the operation

  • For common operations, the wallet default is usually appropriate

  • For complex or unusual operations, research the typical gas requirements beforehand

4. Optimize Transaction Parameters

Many wallets offer options to customize your transaction:

  • Gas priority: Setting lower priority saves money if you're not in a hurry

  • Max fee: Setting a maximum you're willing to pay ensures you won't overspend

  • Advanced settings: Some wallets let you fine-tune exactly how much priority fee to include

5. Batch Transactions When Possible

Instead of making multiple separate transactions, look for ways to combine them:

  • Transfer multiple tokens in one transaction using specialized tools

  • Interact with DeFi platforms that allow multiple operations in one transaction

  • Plan ahead to minimize the number of separate blockchain interactions

Common Questions About Gas Fees

"Why do I pay gas fees for failed transactions?"

Even when a transaction fails, validators have already performed the computational work of attempting to process it. Since they've used their resources, they still receive compensation. This is why it's important to set appropriate gas limits and understand what you're approving.

"Are gas fees the same as transaction fees on centralized exchanges?"

No. Centralized exchange fees are set by the company operating the exchange and typically cover their operating costs and profit margin. Gas fees are payments to the decentralized network of validators who process blockchain transactions.

"If I offer higher gas fees, will my transaction always go through faster?"

Generally yes, but not always. During extreme network congestion, even high gas fees might result in delays. Additionally, there's a point of diminishing returns – once you've outbid most other pending transactions, bidding even higher offers minimal additional benefit.

"Do I need to pay gas fees to receive cryptocurrency or NFTs?"

No. The sender pays the gas fees for transferring assets to you. However, once you receive them, you'll need to pay gas fees for any transactions you initiate with those assets.

Gas Fees and ENO: A Smoother Experience

ENO has taken several steps to minimize the impact of gas fees on users' experience:

Arbitrum Integration

ENO operates on Arbitrum, a leading Ethereum Layer 2 solution, providing several benefits:

  • Dramatically Lower Fees: Transactions on ENO typically cost just a fraction of what they would on Ethereum's main network

  • Same Security: Arbitrum inherits Ethereum's security model, so your assets remain safe

  • Faster Transactions: Confirmations happen more quickly, improving the overall user experience

Optimized Smart Contracts

ENO's smart contracts are designed with gas efficiency in mind:

  • Streamlined Code: Eliminates unnecessary computational steps

  • Batched Operations: Combines multiple actions where possible

  • Gas-Efficient Standards: Uses the most efficient token standards and methods

Transparent Fee Structure

When using ENO, you'll always know what you're paying for:

  • Clear Fee Display: All gas fees are shown upfront before you confirm transactions

  • Fee Breakdowns: Separate marketplace fees from blockchain gas fees for clarity

  • Gas Estimations: Accurate estimates help you make informed decisions

Educational Resources

Through ENO Academy, users can access resources to better understand and manage gas fees:

  • Gas Fee Tutorials: Learn the fundamentals of how fees work

  • Optimization Guides: Discover strategies to minimize your costs

  • Network Status Updates: Stay informed about current gas prices and network conditions


Conclusion: Navigating the World of Gas Fees

Gas fees are an integral part of how blockchain networks function. While they can be frustrating at times, understanding why they exist and how they work helps you navigate the crypto ecosystem more effectively.

As blockchain technology continues to evolve, solutions for high gas fees are advancing rapidly. Layer 2 networks like Arbitrum (which ENO uses), upcoming Ethereum upgrades, and alternative blockchain designs are all working to address this challenge.

By following the strategies outlined in this guide and leveraging platforms like ENO that prioritize gas efficiency, you can minimize these costs while enjoying the benefits of blockchain technology. The future of Web3 is becoming more accessible every day, and understanding gas fees is an important step in your journey.

Ready to experience lower gas fees? Explore the ENO marketplace on Arbitrum and see how much you can save while trading NFTs and engaging with digital creators.


This article is part of ENO's educational series for Web3 beginners. Our mission is to make the exciting world of digital assets accessible to everyone through clear explanations and user-friendly tools.

PreviousWhat is Cryptocurrency?NextStaying Safe in Web3

Last updated 16 days ago

Page cover image