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Author: Admin | 2025-04-27
Table of ContentsWhat are Ethereum gas fees?How are gas fees calculated?Why are ETH gas fees high?How does the Ethereum Merge affect gas fees?Frequently asked questions about ETH gas fees (FAQs)Buy Ethereum via MoonPaySell Ethereum via MoonPaySwap Ethereum for more cryptoMrig P also contributed to this article When it comes to decentralized applications (dApps), there is one clear blockchain leader: Ethereum.As the world's first, largest, and most widely used blockchain for DeFi, it hosts thousands of dApps that attract millions of users who conduct billions of dollars worth of daily transactions. While these transactions differ in size, form, and nature, they all have one thing in common: they require users to pay gas fees. But what are gas fees and why are they necessary?This article explains what Ethereum gas fees are, why they can be expensive, and how you can pay lower fees.Ethereum gas fees are the transaction fees users pay on the Ethereum blockchain to conduct transactions and execute smart contracts. Users pay this fee in Ether (ETH), while the network nodes earn a fraction of fees for validating transactions via Ethereum's Proof of Stake (PoS) consensus mechanism.How are gas fees calculated?To best understand how gas fees are calculated, we'll first need to clearly define a few terms.1. Gas: Gas is the unit that measures computational power required to conduct a transaction, which varies depending on the complexity of the transaction. The computation and gas units needed for a simple token swap, for example, will be much lower than for minting an NFT or publishing a smart contract. 2. Gas price: The gas price is the price per unit of gas, and it is measured in gwei, a smaller unit of ETH that equals 0.000000001 ETH (10-9 ETH). (Conversely, 1 ETH equals 1 billion gwei).3. Gas fees: Gas fees are the final fees paid by users to complete a transaction. Sample gas price (in Gwei) for Ethereum transactions (Image source)Now, let's see where these terms fit into the gas fee calculation formula.Gas fee calculation before the London upgradeThe formula to calculate gas fees has changed since the London upgrade, which was implemented in August 2021.Before the London upgrade, users had to make an assumption about their gas price based on network congestion, or how busy the network is at any given time. In doing so, every user tried to outbid as many other users as possible to try and get their transactions validated first.The formula to calculate the gas fees before the London upgrade was:Gas fee = Gas units (limit) * Gas price per unitBy default, the minimum gas unit you must spend on any Ethereum transaction is 21,000.So, let's suppose Alice is sending 5 ETH to Bob. The gas
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