Gas fees on Ethereum are nearing record highs once again, putting pressure on everyone’s wallets. Ethereum transactions are now more than 20X more expensive than most other popular blockchains, with an average Ethereum gas charge of more than $147.95 for ERC-20 transfers (as of January 20, 2022). In the majority of circumstances, Ethereum is now essentially worthless for low-value transactions as it gets progressively expensive to utilize.
Consensus, which guarantees that all members in the network agree on a certain state of the network, is one of the fundamental pillars of blockchain. Miners employ their computing resources to solve mathematical challenges in Proof of Work consensus algorithms. The privilege of adding transactions to a block would go to the first miner who solved the riddle.
Ethereum gas costs are essentially transaction fees paid to miners. On blockchain technology, users must pay gas fees to miners in order for their transactions to be included in the block.
Surprisingly, a basic supply and demand calculation plays a big role in an Ethereum gas fees calculator. In the event of greater transaction demand, miners may choose to include transactions with higher gas fees. As a consequence, customers would have to pay more for gas in order to process transactions faster and more efficiently.
The popularity of the decentralized finance (DeFi) movement has put a lot of strain on Ethereum, which hosts the bulk of dApps. Users have had to pay miners greater and higher transaction or gas costs as DeFi activity has increased. Regular consumers have found it uneconomical to engage with decentralized apps as a result of this.
With Ethereum 2.0, the gas problem will be resolved as promised by the co-founder of Ethereum, Vitalik Buterin. However, the update, which will be implemented in stages and would strengthen the network in many ways, could take years to complete. In the meanwhile, users can utilize a number of methods to reduce their Ethereum gas prices and find the lowest crypto transaction fees. Here are some of them:
Invest in a Layer-2 solution
Since 2017, Ethereum’s high gas prices have been a reoccurring issue.
This has generated a slew of layer-2 solutions, all of which try to dump some of Ethereum’s transaction volume to a separate network before validating the results on the main chain.
These can vary greatly in terms of shape and function, but many of the more popular options have been well battle-tested and can save consumers a significant amount of money on gas.
The most popular universal layer-2 solutions for Ethereum are Polygon, Arbitrum, and Optimism. According to data from L2Fees, they can reduce fees by up to 90% when transferring tokens and somewhat less when transferring ETH.
Track Network Congestion
Your transaction may be put on hold if the number of transactions on the Ethereum blockchain skyrockets. The gas fee keeps rising as the transaction is put on hold. As a result, once the execution process begins, your recommended gas limit will most likely decrease below the current rate. In this situation, the issue would be the potential loss of your gas payments due to an unfinished transaction.
As a result, you should keep a watch on the Ethereum gas fees chart to track trends and make decisions. The general consensus is that you should schedule your Ethereum transactions during non-peak hours.
It is advisable to use Ethereum gas charts to find out what the current gas cost prices are in your local timezone. The chart can be used to calculate an accurate estimate of gas costs as well as to determine the ideal gas limit.
Make Use Of Gas Tokens
When gas prices are low, you can mint gas tokens and then salvage them when prices are high, receiving a refund in ETH to help cover your gas costs.
The storage refund system in Ethereum allows gas tokens to function because it reimburses Ethereum users who delete storage variables. This motivates individuals to keep Ethereum’s state from becoming bloated.
So, using gas tokens, you basically take a snapshot of Ethereum’s state when gas costs are low and then redeem that state when gas prices are higher in order to obtain an ETH refund, which ultimately makes the crypto transaction fees less expensive.
Use Platforms Like Crowdswap.org
Why waste your time searching for the perfect platform to ward off gas fees when you have CrowdSwap? On a single webpage, we present you with various options to swap your tokens and recommend the best choice, which has low gas fees!
In the example below, you can see that the CrowdSwap web app has provided multiple options for swapping the 1INCH token with AAVE. The one at the top has the lowest cost, and this can help you save time and money while swapping a lot of cryptocurrencies.
Choose The Right Time
Currently, there is no method to decrease the gas unit’s impact directly, but there are ways of reducing your overall fee by cutting the base fee and tip.
You could execute your transaction on the network during a time when fewer people are using the blockchain to lower the cost of your total gas fee by paying a lower base fee. This is because base fees are, in some ways, a reflection of demand for Ethereum. When more work is needed to engage with the Ethereum network, gas prices rise. When there are more users attempting to communicate with the network, more work is necessary.
As a result, if you can discover a period when there is less need to connect with the Ethereum network, you can save money on gas by lowering the transaction’s base price. Weekends are typically the ideal time to do so.
Lowering your tip is another way to save money on your total gas bill. Remember that our tip, also known as a priority fee, is a price we can charge miners in exchange for a speedier transaction time. Reducing your tip can be another option to save money on petrol if your transaction isn’t time-sensitive and you’re ready to wait.
Wrapping It All Up
The issue of high ETH gas prices isn’t going away anytime soon. These prices will drop significantly in the near future, thanks to the introduction of layer-2 scaling solutions and Eth2.
However, we must deal with these prices for the time being. So, the next time you need to do an Ethereum transaction, don’t do so blindly. Check the time of day, or see if the identical transaction can be done on a scaled solution, and so on. You can save a lot of ETH right now by toughening up your approach to gas.
Originally published at https://crowdswap.org on January 22, 2022.
