Ethereum is poised to be significantly different from previous cycles. The Ethereum exchange-traded funds (ETFs) are expected to have a major impact, combined with the recent switch to Proof-of-Stake and the numerous protocol upgrades implemented over the past three years.
Although Ethereum wasn’t fully proof-of-stake during the last cycle, its surging popularity will likely lead to a resurgence in high gas fees on the base layer. This scenario will reignite the narrative around Layer-2 scaling solutions, as users seek alternative options to mitigate these fees.
In this article, we will take a look at seven ways to reduce your Ethereum gas fees.
What Are Gas Fees In The Context Of Crypto?
Gas fees are transaction fees needed to perform operations on a blockchain. These fees are paid to network validators in exchange for processing your request and maintaining the overall network.
How Are Gas Fees Calculated?
Gas fees are calculated based on the work required to execute a transaction or smart contract. The more complex a smart contract is, the more it costs, as you make the network do more work.
Why Do Gas Fees Vary, And How Can Users Manage Them?
Gas fees change in relation to network congestion and the level of demand for the blockchain network. Users can calibrate what gas they are willing to pay or maybe choose to do transactions during off-peak hours.
7 Ways On How To Reduce Your Ethereum Gas Transactions
Improve The Timing Of Transactions
High gas prices on Ethereum are primarily driven by network congestion. While transaction volume fluctuates throughout the day, identifying these low-traffic periods can be challenging. Fortunately, Ethereum gas chart webpages offer comprehensive graphs illustrating gas price variations throughout the week, empowering you to make informed decisions for your transactions.
Another strategy is to avoid using the network during working hours or weekdays. Even if you need to send a transaction during the week, do so after midnight.
Regulating Transaction Types
Since the cost of transactions on the blockchain can vary depending on the type of transaction, it’s often cheaper to group similar transactions together.
Here’s an example: Imagine you have two Ethereum wallets, each holding 1,000 tokens. To maximize your returns, you want to move all the tokens to a decentralized application (dApp) vault. This would typically involve two separate transactions: one to transfer all the tokens to a single address and another to lock 2,000 tokens in the vault.
By combining these steps into a single transaction, you could potentially save on gas fees. This is because you would only be paying for one transaction instead of two.
Use DApps That Offer Discounts And Lower Gas Fees
While gas fees can fluctuate, some Ethereum projects offer ways to manage them more efficiently.
Here are two approaches:
- Reduced Fees: Certain projects aim to directly lower gas costs for users. These might involve innovative protocols or partnerships with validators.
- Transaction Batching: Some DeFi applications pool transactions from multiple users. Instead of each user paying individual gas fees, they collectively cover the cost, often resulting in significant savings.
Assess Network Congestion To Plan For The Future
During busy times on the Ethereum network, your transaction might get stuck waiting while the gas fee you set increases. This can lead to your transaction failing because the gas limit you specified is too low for the current price. The worst part? You still pay a fee even though the transaction doesn’t go through.
To avoid this, try scheduling your Ethereum transactions during off-peak hours when the network is less congested. You can also use resources like Ethereum gas charts to track gas price fluctuations and set appropriate gas limits.
Use Accurate Ethereum Gas Fee Trackers
It is very possible that the gas fee estimations provided by your Ethereum wallet are not accurate since it does not take into account the congestion caused by real-time transactions.
It is best that you use specialized tools such as Etherscan Gas Tracker; this tool performs an analysis of the pending transactions that are taking place on the Ethereum mainnet and offers a number of different estimations for the time-sensitive gas charges.
Use Ethereum Layer-2 Scaling Solutions
Because the high volume of transactions on the Ethereum mainnet is quite expensive, there are solutions for the second layer that assist users in scaling their transactions. Layer twos makes use of technologies such as Rollups and Sidechains bringing about a reduction in the cost of gas and a speedier conclusion to the transaction.
Check The Cost Of A Smart Contract Function
Operational codes (opcode) are instructions the Ethereum Virtual Machine (EVM) must take to perform a smart contract transaction.
Each of these codes costs a certain amount of gas fee to be run on the EVM. If you add up all the operational codes in a single smart contract and multiply each by the cost of each code, you get the total amount of gas fees that it takes to deploy or use a smart contract.
The more complex that a smart contract is, the more it costs to use it and this is because you are making the EVM do more work.
Final Thoughts
There is no denying that Ethereum gas fees have been too high, and it seems like they are only going to get worse in the coming months. This is not just because the network is going to get busier, but there are still way too many people who do not understand how Ethereum gas works.
It is likely that thousands of Ethereum users are unintentionally contributing to higher gas fees. This could be due to impatience or simply a lack of awareness. If everyone understood how to set the appropriate gas limit for their transactions, the overall gas costs could potentially decrease significantly!
