Definition

Gas — a unit measuring computational effort needed to execute operations on the Ethereum network. The more complex the operation, the more gas required.

How Gas Works

Fee = Gas Used × Gas Price

Example:
21,000 gas × 30 Gwei = 630,000 Gwei = 0.00063 ETH ≈ $1.50

Terminology

Term Meaning
Gas Limit Maximum gas you're willing to spend
Gas Price Price per gas unit (in Gwei)
Gas Used Actually spent gas
Gwei 0.000000001 ETH

Typical Gas Costs

Operation Gas Used Approximate Cost*
ETH transfer 21,000 $1-5
ERC-20 transfer 65,000 $3-15
Uniswap swap 150,000 $7-35
NFT mint 200,000+ $10-50+
Complex DeFi contract 500,000+ $25-100+

*At Gas Price 30-50 Gwei

Why Gas is Expensive

  1. High network load — many users, limited block space
  2. Limited block size — ~15M gas per block
  3. Auction model — highest bidder goes first

How to Save on Gas

Timing

  • Weekends cheaper than weekdays
  • Night (UTC) cheaper than day
  • Use Gas trackers

Technical Methods

  • Aggregate multiple operations
  • Use Layer 2 (Arbitrum, Optimism)
  • Cancel "stuck" transactions

Alternatives

  • Solana — fees < $0.01
  • Polygon — fees < $0.01
  • Base — low fees

EIP-1559: New Fee Model

After the 2021 upgrade:

  • Base Fee — burned (makes ETH deflationary)
  • Priority Fee — goes to miners/validators
  • More predictable fees

Gas and DCA

When using DCA for ETH and tokens:

  • Consider fees for small amounts
  • Invest less frequently but larger (weekly vs daily)
  • Use exchanges with free withdrawals
  • Consider Layer 2 for accumulation

Tip: If the fee is > 5% of purchase amount, better wait or increase the amount.