4 Ways to Avoid High Ethereum Gas Fees – WazirX Blog
Cryptocurrency is now becoming mainstream. You can always pay in cryptocurrency, whether you want to trade non-fungible tokens (NFTs) or buy food. On the other hand, paying using cryptocurrencies is a bit more complicated. First, users are forced to pay the cost of gas when transacting on the Ethereum network. Miners pay compensation for the computational power required to validate user transactions.
Gas prices, commonly known as “gwei”, can range from $5 to $150 in a matter of seconds. Its high price has been a sore spot for consumers who are devoted to Ethereum. In this article, we will look at gas fees, why they are so high, and how to avoid paying exorbitant Ethereum gas prices.
Let us start our journey by understanding what is gas charge.
What is the gas fee?
A gas fee is a fee, or pricing value, required to complete a transaction or execute a contract on the Ethereum blockchain platform. Priced in the smaller part of the cryptocurrency, Ether (ETH) is known as Gwei, often referred to as nanoth. Gas fees are used to distribute resources in the Ethereum Virtual Machine (EVM), allowing decentralized applications (DApps) such as smart contracts to operate in a secure but decentralized manner.
How is the gas fee determined?
The actual gas price is determined by supply and demand among network miners, who may refuse to complete a transaction if the gas price falls below their threshold, and network users looking for processing power.
If a user-established gas limit (the maximum amount of gas a user is willing to pay on a transaction) is not acceptable to them, miners may refuse to execute the transaction.
On Ethereum, transaction fees are divided into three parts:
- Base Fee: This is the minimum amount required for the transaction.
- Gas Limit: This is the smallest amount (configurable) that the user is ready to spend for a transaction.
- tip: This is a small fee that you pay for miners to expedite their transactions.
How it usually works: All unprocessed transactions on Ethereum are moved to the “mempool” memory pool. Then, miners select the transactions they want to validate there.
Reason behind high gas charges
Many blockchain software developers build their views on Ethereum, the most prominent blockchain for smart contracts. Imagine how these smart contracts could represent complete exchanges, NFT collections, DAOs and metaverses. Each of these unique protocols or initiatives has the potential to handle millions of transactions each day.
The maximum block limit is gradually reached when users from different projects conduct transactions and other processes on the same blockchain. Users who want their transactions to be processed quickly can pay additional tips, making the process of joining a block even more competitive. On certain days of the week, when there is less traffic on the blockchain, it is possible to get comparable cheap gas fees. However, transactions on the blockchain can fill space rapidly, increasing gas prices over time.
Ways to avoid high gas charges
Here are four ways to spend less on gas on Ethereum:
- With DeFi Saver, use simulation
You won’t know the actual cost of gas until you complete the transaction and pay for it. However, you can duplicate your transactions with DeFi Saver software. You will first need to develop an Ethereum activity process and then run it virtually.
The real world simulation will give you a payable and maximum gas charge in ETH. Then you can design your complete approach to saving money on gas. Execute your way on the Ethereum platform now to save money on gas.
- customized smart contract
Smart contracts can be customized, which is a less extreme method. However, the more complex the smart contract, the higher the cost. As a result, a smart contract should be as straightforward and concise as possible. Remove all unnecessary functions and examine the code to see if it can be reduced. Perhaps also check whether certain operations, such as whitelist management, can be performed outside the smart contract.
- Using layer 2 scaling solution
Due to congestion, transactions on the Ethereum mainnet (layer-one) are expensive. Therefore, layer-two solutions are available to assist users in scaling up transactions.
On this network, Layer-2 uses technologies like rollup and moves transactions to the sidechain. As a result, this new process saves money on gas and speeds up the completion of transactions. Some well-known layer-two scaling options include Optimism and Arbitrum, as well as Polygon.
- use your gas token
You can earn ETH as a refund when you erase your storage variables on the Ethereum network. This is the backbone of the gas token. When the cost of gas is cheap, you can create a large number of gas tokens.
Redeem your gas tokens to ETH when you need to complete network transactions. Then, use the ETH that is given to you to pay for the gas.
Whatever operations are performed on Ethereum, the problem of scalability will remain for many years. Therefore, avoiding exorbitant Ethereum gas prices is an excellent project to take up at any time.
With the above tips, you can always spend low Ethereum gas fees when casting your NFTs or transferring tokens as quickly as possible.
Disclaimer: The cryptocurrency is not legal tender and is currently unregulated. Please ensure that you do an adequate risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information in this section does not represent any investment advice or the official position of WazirX. WazirX reserves the right, in its sole discretion, to modify or change this blog post for any reason at any time and without prior notice.
4 Ways to Avoid High Ethereum Gas Fees – WazirX Blog
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