If you have been in the NFT space then you have probably heard of the term gas fees. Although it’s a simple concept it’s important to understand as it’s a core component of the NFT ecosystem.
But don’t worry. In this article, I will be covering all aspects of NFT gas fees so you can navigate the space with ease. So without further ado, let’s jump right in.
Simply put, NFT gas fees are the cost it takes to complete a transaction. Ultimately, they are used to compensate validators for securing the network.
How do they work?
Cryptocurrencies utilize blockchain technology which is a digital database known as a ledger. This database is secured by a decentralized network of computers. Gas fees are essentially the cost of computational effort required to execute and record operations on this decentralized network.
Why are NFT gas fees necessary?
In essence, gas fees are necessary as they incentivize people to secure the network. Validating transactions costs money in the form of electricity and hardware therefore compensation is needed to offset this cost. Without these fees, there would be no one willing to secure the network and so it would ultimately fail.
The cost of gas
The cost of NFT gas fees depends on the network and the congestion. For Ethereum, it can be as little as 10 cents but at peak times it can go over a few dollars. On the other hand, for newer blockchains such as Solana, the gas fees are negligible at just a fraction of a cent.
The congestion of the network is ultimately caused by high demand. During these moments validators can choose to include the transactions that pay more while declining the rest.
Not to mention, users can speed up transactions by paying a higher gas price. This is apparent in cryptocurrency and NFT launches when price spikes extremely high as people compete to purchase the assets.
The last factor that determines the cost of gas is the complexity of the transaction. Simple transactions require minimal cost while executing complex smart contracts and NFT mints will cost more.
How to spend less on gas
Avoid peak times – as mentioned previously high demand leads to high transaction costs. Therefore, it’s beneficial to wait for the network to become uncongested.
Regarding NFTs, it is best to avoid the time immediately after launch when demand is at its highest. You can use websites like solana.com and eth gas station to evaluate the transaction costs.
Utilize cheaper blockchains – if you want low gas fees it’s best to choose the cheaper networks. These include Solana and avalanche to name a few.
Moreover, if you want to use Ethereum you can use various scaling solutions to avoid high gas fees. These act as sidechains with much cheaper transaction costs. The most notable example is Polygon.
Set a gas limit – at the end of the day, users can set a hard limit on the transaction cost. The drawback to this option is that it can take some time to process.
Best gas fee trackers
Eth Gas Station – this is the most popular gas tracker for the Ethereum network and for good reason. It has a simple user interface that details the transaction cost from fast to slow. Not only that, but it has a leaderboard detailing the applications which consume the most gas. Overall, it’s a great website that is easy to use
Solana.com – this is a great alternative for the Solana blockchain. This is the official website for Solana so you can be sure that it’s reliable and up-to-date information. As shown in the image above it is a simple interface containing the transactions per second, avg gas price, and the number of validator nodes.
Bottom line
As mentioned previously NFT gas fees are a simple concept. However, there is some complexity in minimizing the cost and tracking them. Essentially, if you want to avoid high gas fees you need to plan and pick the right blockchain for you. Now that you understand the basics of gas fees you can trade NFTs with confidence. I hope you found this guide useful and thanks for reading.
Want to learn about NFT Presale vs NFT Public Sales? Click here to read my previous article.
