With average gas fees on Ethereum costing around $46, you can reduce fees by transacting on layer-2s, or use competing low-fee blockchains like Solana, Terra and Avalanche.
Ethereum gas fees are once again approaching record highs, putting a strain on everybody’s wallets.
With an average Ethereum gas fee now sitting at more than $46 for ERC-20 transfers, Ethereum transactions are now more than 20X higher than most other popular blockchains.
As Ethereum becomes increasingly expensive to use, it is now essentially unusable for low value transactions in the majority of cases.
Fortunately, there are a number of ways to cut transaction fees down to a bare minimum, helping you get more out of your transfers.
Here’s what you need to know.
How to Reduce ETH Gas Fees
Time Your Transactions
Though it is true that Ethereum transaction fees are generally high all the time, the average cost of a transaction can vary considerably throughout the day or week.
Because of this, if your transaction isn’t urgent, you will likely find that you can potentially cut your costs by more than 50% if you send in your transaction when there is less demand on the network.
EthereumPrice provides a useful tool to help you work out when the gas price is at its lowest. As you can see, the gas price tends to be a lot lower after midnight on the weekend and is generally at its lowest at around midday every day.
Consider holding off on your transaction until the gas price is relatively low, but bear in mind that there are often times of major congestion where even 100+ gwei is a fair price for gas.
Use a Layer-2 Solution
Ethereum’s high gas prices have been a regularly recurring problem since 2017.
This has spawned a wide array of layer 2 solutions, which aim to offload some of its transaction volume to a separate network, before finalizing the results of these transactions on the Ethereum main chain.
These can vary considerably in their form and function, but many of the more popular solutions have been sufficiently battle-tested and can result in significant gas cost savings for users.
Polygon, Arbitrum and Optimism are currently the most popular universal layer-2 solutions for Ethereum. As per data from L2Fees, these can offer a potentially 90%+ reduction in fees when transferring tokens, or slightly less of a reduction when transferring ETH.
Many of the most popular DeFi protocols and DApps have deployed on one or more layer 2s, so we recommend checking to see if your favorite app is supported.
Using Other L1 Blockchains
One of the best performing sectors of 2021 was so-called "Ethereum killers," or competing Layer-1 blockchains that promises ultra-low transaction fees and fast throughput compared to Ethereum. The most popular blockchains, termed SolLunAvax, has exploded in popularity, and market cap — it grew from a combined market cap of around $681M at the start of 2021 to $94.5B now, a staggering 138X increase in over a year.
Average transactions on Solana cost around $0.00025, while transferring on Avalanche costs even lesser —around $0.000004 according to AVAX gas tracker. With their increasing popularity and users flocking to these low-cost blockchains, their respective ecosystem has also exploded in numbers. Users can check out popular Solana ecosystem apps like Serum and Raydium for DeFi applications. For Avalanche ecosystem apps, protocols like Trader Joe and Pangolin are popular among DeFi users. Terra's vibrant ecosystem are also highly popular among LUNA-tics, with Anchor Protocol and Mirror Protocol the most popular.
Why Are Your Transaction Fees Costing so Much?
One of the major reasons why transactions cost so much usually boils down to the following:
- You’re trying to transfer tokens
- You’re invoking a smart contract
Unfortunately, any transaction that involves executing a smart contract and/or sending ERC-20 or any of the variety of NFT token standards will cost significantly more than conducting a simple ETH transfer. This is due to the fact that smart contract executions are far more taxing on the network than moving ETH between accounts.
Contrary to popular belief, the size of the transfer (in ETH terms) has no impact on the cost of the transaction, only the amount of computational work required for the transaction has an impact. As a result, more taxing transactions simply cost more.
But there is a way to minimize costs even when performing resource-heavy transactions — by aggregating transactions with other people looking to complete similar tasks, or by optimizing its gas efficiency.
A large number of platforms have emerged in recent months to help users do exactly this. This includes DEX aggregators like 1inch and Matcha; yield aggregators like Yearn Finance and Zapper; and DSN aggregators like ColdStack.
These platforms often not only improve gas efficiency, but also the yields you get from your transaction — potentially boosting your overall returns considerably.
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FAQs
Do This Instead. With average gas fees on Ethereum costing around $46, you can reduce fees by transacting on layer-2s, or use competing low-fee blockchains like Solana, Terra and Avalanche.
Can I avoid Ethereum gas fees? ›
Gas fees are an essential part of the Ethereum network, and they are necessary to incentivize miners to process transactions and secure the network. As a result, there is no way to completely avoid gas fees for Ethereum transactions.
Will Ethereum ever fix gas fees? ›
Ethereum's notorious gas fees are unlikely to fall straight after the Merge completes. It won't be until Ethereum 2.0 implements blockchain sharding that users see a reduction in on-chain gas fees.
Why are Ethereum gas fees so high now? ›
Gas prices fluctuate with network demand, meaning costs rise as more users seek to include their transactions in the next Ethereum block. In this case, rising activity in Ethereum's NFT market appears to be a primary source of the newfound demand for gas.
What happens if an ETH transaction runs out of gas? ›
This means that all the gas units up to the limit you set were used up before the transaction could be fully processed. To avoid another "out of gas" error, you will need to increase the gas limit of your next transaction.
What time of day is ETH gas cheapest? ›
When are the Ethereum gas fees the lowest? Between 2 and 6 PM UTC,Ethereum transaction fees are the highest. The best times to do Ethereum transactions are early in the morning,between 1:00 and 2:00 UTC,or late at night,between 9:00 and 11:00 UTC.
How do I cancel an ETH transaction without gas? ›
Canceling a Transaction
- Head to Etherscan.io, Ethplorer.io, or EthVM.
- Paste your transaction hash. ...
- If it says pending, make note of the 'Nonce' being used by the transaction, then access the wallet you used to send the original transaction on MEW.
- In the left-side menu, click 'Send', then choose 'Send offline'.
According to a new clarification by the Ethereum Foundation on Wednesday, the network's upcoming proof-of-stake transitory upgrade — dubbed the "Merge," — will not reduce gas fees. Regarding this, the Ethereum Foundation wrote: "Gas fees are a product of network demand relative to the network's capacity.
Do you lose the gas fee if an ETH transaction fails? ›
That payment is calculated in gas, and gas is always paid in ETH. You are paying for the computation, regardless of whether your transaction succeeds or fails. Even if it fails, validators must verify and execute your transaction, which takes computational power.
Who keeps Ethereum gas fees? ›
Who Receives Gas Fees? Gas fees go to those supporting and securing the Ethereum network. On Ethereum's execution layer (formerly referred to as Ethereum 1.0), gas fee payouts go to Proof-of-Work (PoW) miners on the Ethereum protocol.
In addition to being under the sway of demand, one of the reasons Ethereum can be costly to transact on is because of its security. In a way, security is the feature for which you're paying a premium.
How much is MetaMask swap gas fee? ›
A service fee of 0.875% is automatically factored into each quote, which supports ongoing development to make MetaMask even better.
Why is MetaMask gas fee so high? ›
MetaMask fees are higher because the Ethereum network currently pays miners who verify your transactions. It is called “gas,” and you may have noticed it in the transaction you sent. The gas is almost always included in all valid transactions and is paid to miners by clients who use the Ethereum blockchain.
Will ETH 2.0 remove gas fees? ›
The EF said the emergence of Ethereum 2.0 will not be a panacea for lower gas fees as the upgrade is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees. "Gas fees are a product of network demand relative to the network's capacity.
What happens to my ETH when ETH 2.0 comes out? ›
What happens to my old ETH tokens when Ethereum 2 is launched? Your existing ETH tokens will be transferable to the Ethereum 2 chain. The legacy proof-of-work Ethereum chain will continue alongside the new Ethereum 2 chain initially.
What day of the week is ETH lowest? ›
The best time to make an ETH transaction is on a Sunday from 6 AM to 8 AM (IST)—that's when ETH gas prices are at their lowest.
Which exchange has the lowest gas fees? ›
Bitgert chain gas fee is $0.0000000000001. It is the cheapest gas fee in the cryptocurrency industry, which is a zero. The gasless blockchain is the reason why Bitgert has been skyrocketing non-stop for a whole week. Bitgert chain is also the fastest chain at 100k APY, which is faster than Solana.
What day of the week is Ethereum price lowest? ›
Ethereum gas is an essential part of the network and most of the time, it can get expensive (to say the least).
...
When are ETH gas fees lowest?
| Day | The time when ETH Gas is lowest (EDT/EST) |
|---|
| Tuesday | 6 AM to 8 AM |
| Wednesday | 11 PM to 7 AM |
| Thursday | 1 AM to 3 AM |
| Friday | 10 PM to 8 AM |
3 more rowsThe pending transaction will get canceled because the blockchain will reject it. This is due to the fact that no two transactions can have the same nonce. Note that the gas fees will be charged even for a canceled transaction.
Can you cash out your ETH? ›
Absolutely! The most common way to cash out Ethereum is by using a crypto exchange. A cryptocurrency exchange is exactly that – you can exchange one currency for another. Cashing out Ethereum is when you exchange your cryptocurrency for fiat currency (usually Dollars or Euros).
It is NOT possible to "undo" or "reverse" a transaction once it is confirmed by the network.
What happens if a transaction uses up all the gas? ›
All remaining gas is refunded to the transaction's originator: the user who initiated the transaction. A transaction that runs Out of Gas is reverted, but still included in a block and the associated fee is paid to the miner. With an overview from the perspective of fuel, let's turn to an overview of fees.
How much gas does it take to transfer 1 Ethereum? ›
A standard ETH transfer requires a gas limit of 21,000 units of gas. For example, if you put a gas limit of 50,000 for a simple ETH transfer, the EVM would consume 21,000, and you would get back the remaining 29,000.
Does sending ETH to another wallet cost gas? ›
The total cost for a transaction also depends on its complexity. Transaction complexity is measured by computational effort, which is delineated in units of "gas." For example, sending ETH from one wallet to another (one of the simplest transactions you can make), may consume up to 21,000 units of gas.
Who makes money from crypto gas fees? ›
Gas fees are the fees users pay on Ethereum to conduct transactions such as swapping or executing smart contracts. Users can only pay this fee in ether (ETH). The network nodes earn a fraction of this fee for spending computing power to validate and confirm the transactions, and the remainder of the fee is burned.
What is the cheapest way to trade Ethereum? ›
Buy Ethereum Through DeFi Exchanges
Decentralized finance, or DeFi, is an anonymous, cheap, and fast way to purchase Ethereum.
How do I get low gas fees on MetaMask? ›
On Metamask, you can set your gas fee to “Low” before confirming a transaction. If you want to save even more gas, click on Advanced Options. In this tab, you can set the max fee to slightly above the 7 day lowest historical gas price from Etherscan chart.
Is it cheaper to move ETH or BTC? ›
The average fee for sending Bitcoin(BTC) to another wallet costs just $1.50 regardless of the transfer amount. Similarly, Ethereum(ETH) costs an average of 0.75% per transaction.
How do I avoid Ethereum gas fees on OpenSea? ›
Gas-Free Actions
- Using tools on OpenSea to create a new NFT, also known as "Lazy Minting"
- Creating a collection.
- Account initialization / proxy deployment.
- Listing an NFT at a fixed price.
- Listing an NFT in an auction.
- Reducing the price of an NFT you've listed. Price drops only apply to ERC-721 NFTs and not ERC-1155 NFTs.
The best way to reduce gas or miners fees is to trade during off-peak hours. While the cryptocurrency markets are open 24/7,the early morning hours between 1am and 8am ET typically see the lowest trading volumes.In contrast,evenings and early evenings tend to be the busiest.
