If you’ve ever sent a transaction on the Ethereum network, you’ll be familiar with the concept of paying GAS. Due to the rise of users and applications being built on the Ethereum network, GAS fees have been rising out of control. There was hope that the Ethereum EIP-1559 London upgrade would reduce the GAS price, but that has yet to be the chase.
So, if you’re tired of paying huge ETH GAS fees and would rather keep your Ethereum to HODL or stake, here are a few ways that you can reduce and save on Ethereum GAS fees.
What is ETH Gas?
ETH Gas is a payment made to the miners that cover the computing of your transaction. When you send a transaction on the Ethereum network you have to pay for this gas. You’ll find an increase in gas fees and therefore higher prices when the network is more congested.
The more complex the transaction (for example if your exchanging and providing liquidity) the higher the gas fees will be. Plus if you’re using the Ethereum network to send transactions at the time this is published you’ll be well aware of how congested it currently is, due to the massive costs to do anything on the network.
What is Gwei?
Gwei is a unit of Ether which stands for gigawei, or 1,000,000,000 Wei. Wei is the smallest unit or the base unit of Ether. Think of Wei as what cents are to the US dollar or satoshis are to Bitcoin.
Why are ETH Gas Fees so High?
Supply and demand ultimately determine the cost of GAS. Therefore, if the demand-side chooses to get their transactions included in a block sooner, then they need to pay a higher price for their transactions per unit of GAS. In the case of an increase in the network activity, the demand for transactions increases; this can lead to a spike in transaction fees.
There are limits to the transaction fees with only a certain amount of GAS being able to be paid per block. However, the miners can slowly raise these limits and increase the GAS limit by small amounts. It is thought that some of the cause to the rise in fees is down to the US-dollar backed stablecoin Tether and the rise in popularity in DeFi and Dapps.
How to Reduce Ethereum GAS Fees
High Ethereum GAS fees are likely to stay with us until the release of Ethereum 2.0. Ethereum 2.0 will go from the high energy/power-intensive PoW (Proof of Work) to Proof of Stake. This will increase the number of transactions the Ethereum network can handle, per second, which will hopefully reduce congestion of the network. Below are just some ways that you can use to help reduce the Ethereum GAS fees.
ETH Gas Station
You can certainly save yourself on GAS fees by editing your GAS with the help of ETH GAS Station. When sending transactions from the likes of MetaMask, the GAS fee will automatically be prefilled for you.
Many users will accept the default GAS price shown in their wallet, this is generally okay. However, sometimes it makes sense to pay more if you want the transaction mined quickly or you may want to save some money and pay a lower GAS fee.
So, instead of just clicking on the confirm button, it’s worth putting in an extra step. Go to ETH GAS Station and check you´re paying the correct GAS fee and if you´re not, click the edit button and amend your GAS fee.
Just a word of warning, if you reduce the GAS fee and pay too little, your transaction may become stuck (or fail) and you might have to pay for this failed transaction.
With the price of gas at the user’s control, it is tempting to go for cheaper or slower speeds. But set the limit too low and your transaction can not be executed because it runs out of gas. Then you’ll have to resubmit it, costing you more in gas fees. While offering a high gas price can speed up confirmation a bit, there is a limit to the acceleration. Therefore overspending won’t necessarily help you out either. So it’s important to get the price right.
Eth GAS Station will tell you real-time GAS fees and recommend GAS fees in GWEI for fast, standard or safe low transactions. As well as the time it’ll take to complete, by choosing these different speeds.
ETH Gas Speeds
Safe Low – This is a gas price that is intended to be both cheap and successful. It may take a bit longer to get a confirmation with this price but it should be safe to use. This price is determined by the lowest price where at least 5% of the network hash power will accept it. It requires that at least 50 transactions have been mined in the last 24 hours at this price.
Average – This is the price accepted by top miners who account for at least 50% of the blocks mined. This is a safe and prompt transaction. This is the price that usually reflects the wallet defaults.
Fastest – This is the lowest gas price that is accepted by all top miners (estimated over the last two days). Therefore, transactions with this gas price should be accepted by all the top pools. Paying more than this price is unlikely to help.
They do also have other information on their sites such as leaderboards and charts. But to be honest the majority of users will come here to check the price of gas and then leave the web page.
So, once you’ve checked your gas fees and chosen the required speed for your transaction, you can then edit this in Metamask. Which should in turn save you money if you’re willing to accept a slower transaction time (for example).
Reduce GAS Fees with Ethereum Layer 2
As more applications continue to be built on the Ethereum network, the busier the network becomes. GAS prices increase as senders bid up the GAS to push through their transactions, to be confirmed on the next block. Unfortunately, this can make using Ethereum Mainnet (layer 1) very expensive. The likes of Arbitrum, Optimism and Polygon are Layer 2 solutions that run on top of Ethereum. These layer 2 solutions improve transaction speeds and more importantly, reduce GAS fees.
Arbitrum is an Ethereum layer 2 scaling solution developed by Off-Chain Labs. Similar to Optimism and Polygon, Arbitrum was designed to boost Ethereum’s transactional throughput and minimise transaction fees at the same time.
The three primary components of Arbitrum include validators, compiler, and the EthBridge. You can also check out our Arbitrum guide here.
Optimism is a Layer 2 scaling solution for Ethereum that supports Ethereum’s Dapps. The Optimistic Ethereum network lets you send transactions, similar to Ethereum, but with 2 main advantages which are fast transaction speeds and lower transaction fees. Check out our below tutorial, where we explain how to use Optimism and bridge your Ethereum based tokens across to Optimistic Ethereum. You can also check out our Optimism guide here.
Polygon, previously known as Matic, is a protocol for building and connecting Ethereum-compatible blockchain networks. The aim is to solve issues that are combined in other blockchains such as high gas fees and slow speeds without sacrificing security.
ETH Gas Tokens
Another option to reduce Ethereum GAS fees are Gas tokens. Gas Tokens can help users save on fees by storing cheap gas in periods of inactivity, using a clever contract trick that refunds gas when freeing storage. The likes of decentralised exchange aggregator 1inch use a gas token called Chi Gas Token.
The idea is similar to the GasToken token concept but it has some improvements. Chi is pegged to the Ethereum network’s gas price. When the gas price is low, the Chi price is also low, and the opposite. Just like GasToken, Chi is tokenized gas on the Ethereum network.The only difference is that Chi is used on 1inch and Curve.fi, while the GasToken is used across the entire Ethereum network.
Crypto Wallets with Zero Fees
A great way to save on fees is by using wallets with zero gas fees. Previously these wallets included the likes of Digifox and Argent who were covering gas transactions costs themselves. Unfortunately, due to increased gas fees, it has no longer became feasible for wallets to continue to offer zero GAS fees.
FTX (formally Blockfolio) the popular portfolio tracking app and exchange have released an update to include “Trading”. Giving users the ability to trade cryptocurrencies and stocks at zero fees. Not only that, but you’ll earn free tokens for every trade over $10. Sign-up to FTX and get your free token worth up to $10 by using FTX Referral Code: 9202836.
The Trade functionality is powered by FTX who also offer free withdrawals from the platform when staking their own FTT token.
Argent is an Ethereum based mobile wallet where you can store, send, and save; borrow, earn interest, and invest. With the ability to enjoy decentralized apps in just a few taps including the likes of Aave, PoolTogether, Compound Finance, and Uniswap.
The Argent wallet includes a couple of features that are free, including their Security, such as adding a Guardian or changing your daily limit and it’s free for their Dai Savings Rate which is still subsidised by Maker.
Digifox, is an all-in-one finance application created by popular YouTuber Nicholas Merten (AKA DataDash). With DigiFox you can buy and swap crypto and send your money globally, at fees as low as $0.15. Plus, they have an “Earn” feature, using integrated platforms such as Celsius and Compound. This enables you to earn interest of between 5-9%, which is far better than any standard savings account.
Dharma is an open-source lending/savings account built on Compound. The Dharma Smart Wallet is a non-custodial wallet that automatically lends out any DAI or USDC it receives on Compound generating a variable interest rate.
It’s worth checking out the Dharma smart wallet which is currently still claiming zero gas fees when using their smart wallet.
Dapper ETH Wallet
The Dapper wallet is an Ethereum smart wallet created Dapper Labs the creators of CryptoKitties. Allowing you to send, store, and manage your blockchain-based assets. Dapper Android also lets you play your favourite blockchain games through their easy-to-use built-in browser.
I believe that the Dapper ETH wallet (available on GooglePlay for androids) also provide a few free transactions per week. Plus includes the ability to buy gas “packages”. Although this isn’t a wallet I’ve personally used.