Tips to Easily Reduce Gas Fees
Gas ensures that our crypto transactions get processed: may it be minting an NFT, or buying another Axie — all of these movements require a small fee.. It is a unit used to measure the computational effort needed to perform specific actions within a blockchain. Like gasoline for cars, gas drives us around the crypto world, fueling our transactions and enabling us to perform different operations. And in the same way that the gasoline we need is determined by where we want to go, the gas cost required varies for every operation we make. For example, simply checking one’s balance definitely costs less gas than sending a transaction.
The gas fee charged by an action is determined by multiplying the gas price by the current gas cost. For example: Ethereum, which usually charges the most, measures its gas price in Gwei or gigawei which amounts to 0.000000001ETH. If the current gas price is 17,000 and a transaction costs 100 Gwei, you’ll be charged 1.7M gwei or 0.0017ETH for it.
Once a transaction has been made, it goes to the mempool where miners are waiting to pick it up to put it in a block and add it to the blockchain. If your transaction is pending, it means that it’s still in the pool and is yet to be picked up by a miner.
And because each block has a maximum gas limit restricting the amount of transactions a miner can make, miners therefore prioritize picking up transactions of higher gas prices because it earns them more for the same amount of work they do for the smaller ones. This is why a lot of wallets have fast, medium, and slow transaction confirmation options to give its owners the choice of how much gas they are willing to spend for a transaction.
However, with the growth in popularity of cryptocurrency making blockchains busier than ever and resulting in a demand for more block space and higher transaction costs, smaller players and people from emerging markets are finding it harder to participate in crypto ecosystems.
How do you minimize your gas fees?
Set a personal gas limit. A personal gas limit determines the amount of gas you’re willing to pay for a certain transaction. Almost every crypto wallet now provides this option. You may choose from fast, medium, and slow-speed transaction confirmation in your crypto wallet before sending a transaction and check the fees charged by each option. However, note that the amounts indicated under each option are not always up-to-date as gas prices always fluctuate.
Check gas prices before confirming a transaction. To make sure you’re keeping your gas in check, be sure to check reliable sources like www.ethgasstation.info for Ethereum owners for the most up to date gas fees. After checking the updated gas fee, you may opt to enter the exact amount of gas fee you’re willing to pay for a transaction in your crypto wallet.
Make your transactions during downtime. You must also ask yourself if this is a transaction you need to be doing now. If the transaction is not urgent, it is wise to postpone it to whenever it will cost the least, like on weekends and non-working hours. Because gas fees hike due to great traffic, practice patience and check the traffic from time to time to pick when to best make your transaction or, for Ethereum owners, check Ethereum Gas Charts for updates.
Organize and merge transactions. Similar transactions share similar gas fees and it’s wasteful to make the same transaction twice. For example, if you own tokens in two different addresses and you want to send them to a third one, transferring from each of those separately doubles the gas fees. You will only pay half the gas price if you transfer from the first address to the second, then all from the second to the third.
Turn to Layer 2 scaling. Layer 2 scaling is the term for solutions that increase the capabilities of the ethereum chain by handling transactions off-chain. It improves the transaction speed while reducing the fees. Recently developed programs like Polygon, Optimism, SKALE, and Arbitrum come with low gas fees while maintaining the security of the Ethereum network.
Use gas tokens. Saving gas while simultaneously profiting from gas fees was made possible in 2017 when a group of researchers invented gas tokens. These make use of Ethereum’s storage refund system, where the Ethereum network refunds a portion of the ETH used as gas and users are incentivized for deleting storage. Essentially, this enables users to burn junk data in exchange for Ethereum gas. It is worth noting though that gas tokens tend to clog the Ethereum network, making it not quite the ideal way to save gas.
Use crypto wallets with low to zero fees. There are low to zero-fee crypto wallets that are worth exploring. Dapper ETH, for example, offers gas-free-fee transactions for CryptoKitties. FTX also allows cryptocurrencies trading for free. Other alternatives like Tezos and Binance Smart Chain are also reliable for low to zero-fee transactions and allows you to use the same wallets you use on Ethereum. Meanwhile, for those who play to earn, there is WAX blockchain that is home to popular NFT marketplace Atomic Hub, which has top-selling creators such as Blockchain Heroes and Capcom’s Street Fighter.
As the demand for space in blockchains increases, the gas fees charged for transactions inevitably hikes with it. Users, especially those from emerging markets, must learn to get wiser in navigating the crypto ecosystem, then, to make sure they minimize the charges in their operations and save as much of their earnings as possible.
From scheduling and merging transactions, turning to more direct approaches like Layer 2 solutions and using gas tokens, to switching to low-to-zero-fee wallets, users need as many options as possible to ensure that their hard-earned crypto won’t just burn away from gas fees. XLD Finance acknowledges this and continuously comes up with solutions, especially for people in emerging markets. XLD Finance integrates with multi-chain bridges that support low-cost transactions with xSpend which supports multi-chain bridges like Metamask, Polygon, BSC, and even Robin, and continuously builds other integrations with low-cost transactions.