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Author: Admin | 2025-04-28
Unit is 21,000 by default and Alice chooses to pay 300 gwei per unit based on the current network conditions.Going by the above formula, Alice would pay a gas fee of 21,000 * 100 gwei. Or 2,100,000 gwei, which equals 0.002093 ETH.5.002093 ETH will therefore be withdrawn from Alice's crypto wallet. Bob will receive 5 ETH and the rest goes toward making the transaction successful.Gas fee calculation after the London upgradeThe London upgrade implemented EIP-1559, which proposed a new mechanism to calculate gas fees with a fixed per-block base fee and flexible block size to tackle network congestion. The goal of this upgrade was to remove the unpredictability of gas fees based on network traffic. The lack of surety forced users to try and outbid the gas prices of other users, consequently taking the gas prices even higher.With a pre-defined base fee for every block, the guesswork is no more in the equation and the new formula is:Gas fee = Gas units (limit) * (base fee + priority fee)Now, let's suppose Bob wants to send 5 ETH to Alice. The gas limit is 21,000, the block fee at that instance is 30 gwei, and Bob adds a priority fee of 10 gwei for his transaction to be validated faster.So, Bob would pay a gas fee equal to 21,000 * (30+10) = 840,000 gwei or 0.000839 ETH. Here, the network burns the base fee, i.e. 21,000*30 gwei while the priority fee — 21,000*10 gwei — goes to the validator that adds the transaction to the chain.While most cryptocurrency wallets automatically detect the demand and set the priority fee and gas limit by themselves, you can usually go to advanced settings to alter the numbers when finalizing a transaction.Below is an example from MetaMask, one of the most common Ethereum wallets. In the screenshot, you can see the base price is 16 gwei and the wallet recommends a priority fee of 0.5 to 7 gwei. Further, the wallet also shows the estimated times for respective transaction fees, should you be willing to pay more for faster transactions.Ethereum gas fee details as they’re displayed in MetaMaskIt's important to note though that the London upgrade was not created to directly reduce gas costs on Ethereum. Instead, the aim was to limit the waste of gas due to uncertainty. This is but one of many examples of Ethereum upgrades designed to increase the efficiency of the network.Why are ETH gas fees high?It has not been rare for people to pay hundreds of dollars to execute simple swapping or buying transactions on Ethereum. That is especially the case when the demand is high, such as during the 2021 bull market.But why? While every blockchain strives to
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