Gas fee
Also called: gas · network fee · transaction fee
Definition
A gas fee is the payment you make to a blockchain network to process a transaction or run a smart contract, paid in the chain's native coin such as ETH on Ethereum.
How gas fee works
On Ethereum and similar chains, every operation consumes a set amount of gas units. A simple ETH transfer uses 21,000 units, while a token swap might use 100,000 to 200,000. You pay the number of units multiplied by the gas price, quoted in gwei, where 1 gwei equals 0.000000001 ETH.
Since 2021, Ethereum's fee has two parts: a base fee that the protocol burns and a priority fee, or tip, that goes to the validator. When the network is busy, the base fee rises automatically. If you set a gas limit too low, the transaction can fail and you still pay for the work done.
Gas fees differ widely between networks. Layer 2s and chains like Solana or Tron are usually much cheaper than Ethereum mainnet. When you withdraw from an exchange, you usually pay the exchange's fixed withdrawal fee instead, which it uses to cover gas, so it can differ from the live network cost.
Example
Suppose you send USDT on Ethereum, which uses about 65,000 gas units, when the gas price is 30 gwei. The fee is 65,000 x 30 = 1,950,000 gwei, or 0.00195 ETH. With ETH at 3,200 USDT, that costs about 6.24 USDT. If you waited until the gas price dropped to 10 gwei, the same transfer would cost 0.00065 ETH, about 2.08 USDT.
Common mistakes
- Leaving a wallet with tokens but no native coin to pay gas.
- Lowering the gas limit to save money and having the transaction fail, still paying for the attempt.
- Sending a small amount over Ethereum mainnet when the fee is a big share of the transfer.
Learn and practise
FAQ
Why are gas fees so high sometimes?
Block space is limited. When many people want to transact at once, such as during a popular token launch or a market crash, the base fee rises until demand cools.
Do I get my gas back if a transaction fails?
Usually not. The network still used resources to process the failed transaction, so the gas spent is lost.
Is a withdrawal fee the same as a gas fee?
Not exactly. An exchange withdrawal fee is set by the exchange to cover on-chain costs and may be higher or lower than the live gas fee.