Whenever you perform a transaction on Ethereum, you face an unavoidable question: why do you need to pay fees for sending tokens, purchasing NFTs, or even just querying data? These fees are known as Gas Fees.
Simply put, just as a car needs fuel to operate, every action on the blockchain consumes computational resources. The essence of Gas Fee is to pay for these resources. On platforms like Ethereum with smart contracts, miners (or validators) need to perform complex calculations to verify transactions, and Gas fees are compensation for their work.
Interestingly, even if a transaction ultimately fails, users still need to pay the Gas Fee. This is because the network has already consumed computational resources to verify the transaction, regardless of the outcome. In contrast, Bitcoin only charges fees when a transaction is successful. The design of this mechanism serves two purposes: first, to ensure the network operates normally through economic incentives; second, to effectively prevent spam transactions from clogging the network.
How is Gas Fee Calculated?
Understanding the formula for Gas Fee is the first step in controlling costs. Ethereum’s method of calculating Gas fees changed significantly after the London upgrade in August 2020.
Before the upgrade
Prior to EIP-1559, Gas fee calculation was straightforward:
Gas Fee = Gas limit × Gas price
Where, Gas limit can be understood as the maximum amount of “fuel” (units) needed to complete an operation, and Gas price is the current market “oil price” (priced in gwei, where 1 gwei = 0.000000001 ETH).
For example, if User A needs to transfer 1 ETH to User B, with a Gas limit of 21,000 units and a Gas price of 200 gwei, then:
Gas Fee = 21,000 × 200 = 4,200,000 gwei = 0.0042 ETH
User A’s account will be deducted by 1.0042 ETH, with 1 ETH sent to User B and 0.0042 ETH paid to the miner.
Post EIP-1559 upgrade
The London upgrade introduced a new Gas fee model aimed at making prices more stable and predictable:
Gas Fee = Gas limit × (Base gas price + Priority fee)
There are two key components:
Base gas price: dynamically adjusted based on current block space demand, paid by users and then burned (not received by miners)
Priority fee: optional tip paid voluntarily by users to prioritize their transaction during network congestion
Using the same example, after the upgrade, User A transferring 1 ETH with a Gas limit of 21,000 units, a base fee of 100 gwei, and a user-set priority fee of 10 gwei:
Gas Fee = 21,000 × (100 + 10) = 2,310,000 gwei = 0.00231 ETH
At this point, User A is deducted 1.00231 ETH, User B receives 1 ETH, and the miner earns 0.00021 ETH as the priority fee, while 0.0021 ETH of the base fee is burned.
Why Are Gas Fee Prices So Volatile?
Ethereum uses an auction mechanism to handle transaction queuing. When pending transactions exceed block capacity, transactions willing to pay higher Gas Fees are prioritized for inclusion in the next block, speeding up confirmation.
In recent years, the explosion of DeFi and NFT ecosystems has further driven up Gas fees. Transactions that used to be done on centralized exchanges are now moving on-chain, with liquidity mining, arbitrage bots, and other applications emerging rapidly, keeping the network under high load.
Especially during popular NFT drops or DeFi activity peaks, Gas Fees can spike sharply in a short period. Estimated transaction costs may become insufficient during confirmation, leading to transaction failures. This is why experienced users often set relatively loose Gas limits or immediately execute acceleration operations after submission.
How to Optimize Gas Fees in the Current Environment
Completely eliminating high Gas Fees in the short term is unrealistic, but users do have some practical strategies.
The first approach is technological upgrades. The final completion of Ethereum 2.0 will greatly increase network throughput, alleviating Gas pressure. However, this still requires time. The second approach is adopting Layer 2 scaling solutions like Arbitrum, Optimism, etc., which can significantly reduce transaction costs—sometimes to just a fraction of the mainnet.
However, Layer 2 solutions also have drawbacks: withdrawing funds back to the mainnet (withdrawals) still requires paying high mainnet Gas Fees, and some solutions have longer withdrawal times, making them less suitable for urgent transactions.
For most ordinary users, the most practical short-term methods are:
Monitor Gas Price Fluctuations: Use tools like Eth Gas Station to track real-time fees
Perform non-urgent transactions during low-traffic periods: Choose times when the network is calmer and Gas fees are lower
Batch operations: Combine multiple small transactions into one to share fixed costs
Choose optimal timing: Avoid peak DeFi activity periods and NFT drops
Conclusion
The surge in Gas Fees reflects the vibrancy of the Ethereum ecosystem. Increased on-chain transaction volume and complex smart contracts drive ecosystem growth and market valuation. However, high fees also impact the user experience for ordinary users.
As technological solutions continue to evolve—whether through ETH 2.0 or mature Layer 2 ecosystems—this issue will eventually be alleviated. Until then, understanding how Gas Fees work, monitoring costs, and optimizing payment strategies are essential skills for every Ethereum user.
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以太坊交易成本攻略:如何理解與應對Gas Fee
Why Do On-Chain Operations Require Payment?
Whenever you perform a transaction on Ethereum, you face an unavoidable question: why do you need to pay fees for sending tokens, purchasing NFTs, or even just querying data? These fees are known as Gas Fees.
Simply put, just as a car needs fuel to operate, every action on the blockchain consumes computational resources. The essence of Gas Fee is to pay for these resources. On platforms like Ethereum with smart contracts, miners (or validators) need to perform complex calculations to verify transactions, and Gas fees are compensation for their work.
Interestingly, even if a transaction ultimately fails, users still need to pay the Gas Fee. This is because the network has already consumed computational resources to verify the transaction, regardless of the outcome. In contrast, Bitcoin only charges fees when a transaction is successful. The design of this mechanism serves two purposes: first, to ensure the network operates normally through economic incentives; second, to effectively prevent spam transactions from clogging the network.
How is Gas Fee Calculated?
Understanding the formula for Gas Fee is the first step in controlling costs. Ethereum’s method of calculating Gas fees changed significantly after the London upgrade in August 2020.
Before the upgrade
Prior to EIP-1559, Gas fee calculation was straightforward:
Gas Fee = Gas limit × Gas price
Where, Gas limit can be understood as the maximum amount of “fuel” (units) needed to complete an operation, and Gas price is the current market “oil price” (priced in gwei, where 1 gwei = 0.000000001 ETH).
For example, if User A needs to transfer 1 ETH to User B, with a Gas limit of 21,000 units and a Gas price of 200 gwei, then:
Gas Fee = 21,000 × 200 = 4,200,000 gwei = 0.0042 ETH
User A’s account will be deducted by 1.0042 ETH, with 1 ETH sent to User B and 0.0042 ETH paid to the miner.
Post EIP-1559 upgrade
The London upgrade introduced a new Gas fee model aimed at making prices more stable and predictable:
Gas Fee = Gas limit × (Base gas price + Priority fee)
There are two key components:
Using the same example, after the upgrade, User A transferring 1 ETH with a Gas limit of 21,000 units, a base fee of 100 gwei, and a user-set priority fee of 10 gwei:
Gas Fee = 21,000 × (100 + 10) = 2,310,000 gwei = 0.00231 ETH
At this point, User A is deducted 1.00231 ETH, User B receives 1 ETH, and the miner earns 0.00021 ETH as the priority fee, while 0.0021 ETH of the base fee is burned.
Why Are Gas Fee Prices So Volatile?
Ethereum uses an auction mechanism to handle transaction queuing. When pending transactions exceed block capacity, transactions willing to pay higher Gas Fees are prioritized for inclusion in the next block, speeding up confirmation.
In recent years, the explosion of DeFi and NFT ecosystems has further driven up Gas fees. Transactions that used to be done on centralized exchanges are now moving on-chain, with liquidity mining, arbitrage bots, and other applications emerging rapidly, keeping the network under high load.
Especially during popular NFT drops or DeFi activity peaks, Gas Fees can spike sharply in a short period. Estimated transaction costs may become insufficient during confirmation, leading to transaction failures. This is why experienced users often set relatively loose Gas limits or immediately execute acceleration operations after submission.
How to Optimize Gas Fees in the Current Environment
Completely eliminating high Gas Fees in the short term is unrealistic, but users do have some practical strategies.
The first approach is technological upgrades. The final completion of Ethereum 2.0 will greatly increase network throughput, alleviating Gas pressure. However, this still requires time. The second approach is adopting Layer 2 scaling solutions like Arbitrum, Optimism, etc., which can significantly reduce transaction costs—sometimes to just a fraction of the mainnet.
However, Layer 2 solutions also have drawbacks: withdrawing funds back to the mainnet (withdrawals) still requires paying high mainnet Gas Fees, and some solutions have longer withdrawal times, making them less suitable for urgent transactions.
For most ordinary users, the most practical short-term methods are:
Conclusion
The surge in Gas Fees reflects the vibrancy of the Ethereum ecosystem. Increased on-chain transaction volume and complex smart contracts drive ecosystem growth and market valuation. However, high fees also impact the user experience for ordinary users.
As technological solutions continue to evolve—whether through ETH 2.0 or mature Layer 2 ecosystems—this issue will eventually be alleviated. Until then, understanding how Gas Fees work, monitoring costs, and optimizing payment strategies are essential skills for every Ethereum user.