Like a vehicle needs fuel to run efficiently, the Ethereum network needs gas as well to run its operations efficiently and securely. In Ethereum’s case, this fuel is called ‘gas’ (no pun intended, it is actually called gas). Ethereum has gained a lot of popularity in the past few years and it is adopted more in decentralized finance (DeFi) transactions. This causes a lot of network congestion and leads to increased gas fees. So, how to avoid Ethereum gas fees?
But, before we get there, let’s understand what Ethereum gas fees are? Also, why is it so high?
What Are Ethereum Gas Fees?
Simply put, the Ethereum gas fee is the price you pay when you perform a transaction on the Ethereum blockchain network.
The Ethereum network needs a certain amount of computational effort, which comes from the crypto miners who use Ethereum mining software. Miners mine Ethereum tokens (ETH) to keep the network secure and in return, they receive a reward for their contribution to the network. The miners receive their rewards from the gas fees. The denomination of the gas fee is Gwei and one Gwei is equal to 0.000000001 ETH.
A collection of crypto transactions is called a block and the size of a block is different for different blockchains. For instance, theoretically, Bitcoin’s block size is 4M, but its average size is 1MB.
Contrary to Bitcoin, Ethereum’s block size changes due to the gas spent on a block rather than a data limit. At the moment, the gas limit per block is 30 million gas, but the target size is 15 million gas per block.
When you make a transaction, it competes with other transactions to get in the next block and get sent to the network to get validated. So, if the network is congested, you may need to pay something extra to push the transaction ahead of others. This increases the gas fees.
The competition to get the transaction validated increases the network congestion on the Ethereum network. And, as the transactions pile up, the network is congested even more. The transactions on Ethereum are increasing because of its widespread success in processes such as decentralized exchanges (DEX), blockchain games, DeFi, ERC-20 token transfers, social, and marketplaces. Also, as dApps are introducing more features, their functionalities are becoming more complex. As a result, a smart contract is performing more operations, leading to a more congested network as complex transactions take up more space. So, how to avoid Ethereum gas fees? There are a few ways to avoid Ethereum gas fees and we have mentioned 8 of them for you to use.
Ways to Avoid Ethereum Gas Fees
- Use DeFi Saver App
- Optimize your Transaction Timings
- Use DApps That Offer Discounts and Rebates
- Utilize Gas Tokens
- Accurate Calculation of Ethereum Gas Fees
- Use a Layer-2 Blockchain
1. Use DeFi Saver App
Paying gas fees is tricky because you won’t know how much gas fees you are going to pay until making the transaction and paying for gas. But, to save your gas fees on your transactions, you could use the DeFi Saver app.
- First, combine the Ethereum activities and then rum them virtually.
- The simulation will estimate the gas fee in ETH.
- As per the estimate, you can customize the Ethereum activities to minimize gas fees.
- Lastly, execute the activities on the network and pay less gas fee.
2. Optimize Your Transaction Timings
As we’ve already established, congestion on the Ethereum blockchain causes higher gas fees. But, the network congestion varies throughout the day. During certain times, you’ll notice that the same transaction will cost you a lower gas fee.
However, figuring out lower congestion times could be arduous. It can also hamper your productivity as you have to continuously track gas fees at different hours. For this, you can visit a webpage called Ethereum Gas Charts. This webpage shows detailed graphs of gas prices during the week.
Another way you can reduce your gas fees is to avoid working hours on weekdays. If you need to make a transaction on weekdays, carry them out after midnight. You can also wait for weekends as the gas prices are lower on those days.
3. Use DApps That Offer Rebates and Discounts
One of the easiest ways to avoid Ethereum gas fees is to use Ethereum projects and dApps that offer fee subsidies or nominal fees. If you are looking for such a platform, Balancer is a great one. The platform refunds the gas fees up to 90 percent in the form of BAL tokens. Balancer minimizes the gas fees for high-frequency traders by carrying out traders that don’t leave the vault.
Other DeFi apps such as Yearn’s V2 Vault and KeeperDAO combine individual user transactions. Then, the user pays the gas fees together instead of paying them individually. This saves a lot of gas fees.
4. Utilize Gas Tokens
You can earn ETH when you remove your storage variables on the blockchain. It’s the foundation of gas tokens. You can mint a lot of gas tokens when the gas fees are low. When you are executing your transaction on the blockchain, you can redeem your gas tokens for Ether. Later, you can use the redeemed Ether to pay a gas fee. One of the quickest ways to mint gas tokens is GasToken.io.
5. Accurate Calculation of Ethereum Gas Fees
An Ethereum wallet does not consider real-time congestion of transactions and therefore, it cannot estimate accurate gas fees. You can use specialized tools such as Gas Now or Etherscan’s Gas Tracker if your transactions are time-sensitive.
These specialized tools evaluate pending transactions on the network and then calculate the gas fees. Ultimately, these tools help you save a lot of gas fees and even help you avoid penalties in case you forgot to set correct gas limits.
6. Use a Layer-2 Blockchain
On the Layer One also known as the Ethereum Mainnet, congestion is prevalent and thus, transactions are expensive. Layer-2 blockchains, on the other hand, help users scale up their transactions.
L2 uses technologies such as Rollups to the side chains on the blockchain. This results in lower gas fees and increased transaction completion speeds. Arbitum, Optimism, and Polygon are some layer-two solutions that you should consider.
Will Ethereum 2.0 Reduce Gas Fees and Make Ethereum Cheaper to Use?
Ethereum might tackle the expensive gas fees situation permanently with its Ethereum 2.0 upgrade. In fact, one of the reasons Ethereum is upgrading is to reduce gas fees, as a part of reducing network congestion and speeding up the blockchain.
There are two ways the gas fees will reduce with the ETH 2.0 upgrade. The first is sharding and the second is the switch from the PoW consensus mechanism to the PoS consensus mechanism. With the switching of the consensus mechanism, you don’t have to solve intricate maths puzzles to maintain network integrity. This also leads to fewer transaction fees all while making it easier for extra nodes to join the network and validate transactions. This is a win-win for Ethereum as it reduces gas fees and helps scale the blockchain network.
There are many ways to reduce gas fees and we hope in this guide we have answered the question of how to avoid Ethereum gas fees. These tools are well known and often used by Ethereum users to reduce gas fees. But, with the Ethereum upgrade, the gas fees conundrum might solve itself, but until the upgrade takes place, daily Ethereum users can use these tips and tricks to save a ton of gas fees.