Gas fees: what is it?

What are these sometimes formidable commissions that are levied during certain transactions? If you have made ETH conversions (Ethereum) with another currency, you were probably startled by the amount of commissions charged for such a transaction. For example, you want, out of curiosity, to buy for around 40 euros from UNI in order to get an idea of ​​the evolution of its course at little cost. Only here you are, you find yourself having to pay a total of 110 € for this operation. Or costs of around 70 €.

These fees constitute the ” gas fees ”(This expression literally means“ gasoline costs ”). These are the commissions that are paid to the minor who validates a given transaction. By default, this gas price is expressed in GWei or giga-weis, the weis being the smallest unit of ETH (Ethereum).

In other words: the amount of gas fees is often excessive! Sometimes it is not possible to convert from one currency to another due to the importance of gas fees. L’exchange (marketplace) then lets you know that you do not have enough Ethereum funds to pay these famous commissions. Sometimes, too, you will prefer to reject the transaction believing that the stake is not worth the candle: is it reasonable to pay so much gas fees ?

Why do the gas fees are they that high?

The importance of gas fees is partly the price of Ethereum’s glory. This blockchain is the most used in 2021. Most applications of the Challenge (decentralized finance) are indeed based on Ethereum. This is particularly the case for Compound (loan), Uniswap or Sushiswap (currency exchange), Synthetix (stock market placement) … The same is true for NTF production platforms such as OpenSea or Rarible.

As Ethereum is the most used blockchain, its network is often congested. Miners receive an excess of transactions to process and so they choose to get by by increasing their fees. In fact, if we agree to pay more than gas fees, you can speed up the processing of a particular transaction. Conversely, if you want to pay less, you can choose a slowed down processing time, for example, around thirty minutes. The site etherchain.org gives an estimate of gas fee depending on whether you want the transaction to be fast or slow at a given time.

One way to reduce gas fees involves carrying out transactions at times when Ethereum traffic is most restricted, which is usually Saturdays or Sundays.

A blockchain affair

It is important to know that gas fees vary according to the blockchain contribution. The Ethereum blockchain is the one that charges the highest commissions. However, there are many alternatives with gas fees much more reduced. It may therefore be good to select applications based on one of the following blockchains:

• Binance Smart Chain (BSC). Used on popular platforms such as Pancakeswap, the BSC performs gas fees extremely reduced – of the order of a hundredth of a euro.
• Solana. In less than six months, SOL has climbed into the top 5 cryptocurrencies and this popularity is in part due to gas fees again insignificant, around a thousandth of a euro.
• Polygon. On this blockchain, the gas fees are greatly reduced and this is one of the reasons why the OpenSea platform mentioned above offers Polygon as an alternative to Ethereum for the creation of NFT. However, even if they remain much lower than those of Ethereum, the gas fees on Polygon have tended to grow strongly.
• Tezos. It sees itself as the “green blockchain” and its gas fees are minimal, but so far few platforms have adopted it.
• Ethereum V2. Ethereum version 2, normally deployed in 2022, promises to have gas fees very reduced. To do this, part of the calculations is transferred to a second level with a speed extremely increased processing.

Ethereum’s future in question

Clearly, failing to quickly put its V2 into circulation, Ethereum could be strongly threatened by a blockchain such as Solana, due to the gigantic difference between gas fees.