(High) Gas fees are one of the biggest barriers to mainstream blockchain adoption, however, when you understand them, you can make smarter decisions in Web3. But first, what are Gas Fees?

Gas Fees are basically the transaction costs required to process and validate transactions on a blockchain. Think of them like delivery fees whereby you are paying the network to securely transfer your crypto.

Unlike traditional banks, the blockchain relies on a decentralized network of computers to validate and secure every transaction. This model is what makes Web3 transparent and special, but it also comes at a cost.

Every blockchain including Ethereum, Bitcoin, Solana, Polygon, require gas fees to serve these purposes:

Blockchains rely on miners who carry out Proof of Work, or validators who carry out Proof of Stake to process transactions.

Bitcoin, and pre-merge Ethereum use Proof of Work (PoW), where;

• Miners solve cryptographic puzzles, and the first to do so earns the right to add a new block. They also get rewarded with crypto + transaction fees.

• Gas fees compensate miners for their energy costs & hardware usage because they use really powerful computers to solve these puzzles.

Ethereum 2.0, Solana, and Polygon use Proof of Stake (PoS);

• In this case, validators stake their own crypto to be randomly chosen to verify transactions.

• The higher their stake, the more likely they are to validate transactions and earn gas fees as rewards.

• While this system is more energy-efficient than PoW, it still relies on gas fees to pay validators.

A blockchain with zero gas fees means anyone can flood the network with tons of useless transactions, thereby clogging up the system. Gas fees also act as a filter, making sure only serious transactions get processed.

• The higher the fee you pay, the faster your transaction is confirmed.

• Spam attacks become too expensive to execute on a large scale.

Blockchain gas fees go up when the network is busy. When thousands of people are minting NFTs, swapping tokens, or using DeFi apps at the same time, there will be limited space in each block.

In such instances, higher gas fees equals faster processing, and lower gas fees means your transaction might take longer. This dynamic pricing ensures that urgent transactions are processed faster, while lower-priority transactions can wait until the network cools down.

During the NFT buzz in 2021, gas fees skyrocketed up to $100+ per transaction. Ethereum then introduced EIP-1559 to improve gas efficiency, but fees are still unpredictable.

Being a Layer 2 solution, Polygon helps reduce Ethereum’s gas fees by processing transactions off-chain. Solana’s fees on the other hand stay under $0.01 because its network can handle 65,000 transactions per second (TPS).

Solana’s low fees is thanks to its unique consensus mechanism, which is Proof of History (PoH).

Unlike Ethereum’s Proof of Stake (PoS), where transactions need to be validated in real-time by network participants, Solana pre-orders transactions with cryptographic timestamps before they enter the blockchain.

This means Solana does not need to wait for validators to agree on the order of transactions as they are already arranged. Now you know why Solana’s transaction speed is up to 65,000 TPS, while that of Ethereum is about 20-30 TPS.

Here are some gas-saving hacks to remember ahead of your next transaction:

• Use Layer 2 solutions like Polygon, Arbitrum, and Optimism to avoid Ethereum’s high fees.

• Time your transactions to when demand is lower; this could be late at night, or during inactive hours.

• Choose a low-fee blockchain like Solana or Avalanche for transactions that don’t require Ethereum’s security.

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Thanks for reading. My name is Timi Lawani — I am a Data Analyst & Tech Content Creator passionate about simplifying Web3 and technical concepts.

You can connect with me on LinkedIn and via Email; I would love to hear from you!