Gas Fee
A gas fee is the network fee you pay to have a transaction or smart-contract action processed on Ethereum and similar blockchains. It rises when many people compete for limited block space.
How gas is calculated
Gas measures computational work. A simple ETH transfer uses a fixed 21,000 gas units, while a token swap or an NFT mint uses more because the contract does more work. Your fee is the gas used multiplied by the price per unit of gas, which is quoted in gwei, a billionth of an ETH.
You also set a gas limit, the maximum units you allow the transaction to use. If the transaction runs out of gas, it fails, and the gas already spent is not refunded.
Where the fee goes
Since the London upgrade in August 2021 (EIP-1559), an Ethereum fee has two parts. The base fee is set by the protocol according to how full recent blocks were, and it is burned, meaning destroyed, not paid to anyone. The priority fee, or tip, goes to the validator who includes your transaction. So it is not accurate to say the whole gas fee is paid to validators; on Ethereum, only the tip is. Other chains split fees differently.
An example
Say a swap uses 150,000 gas and the total price is 20 gwei per unit. The fee is 3,000,000 gwei, which equals 0.003 ETH. If the network gets busy and the price jumps to 100 gwei, the same swap costs 0.015 ETH. The work is identical; only the demand for block space changed.
Why fees spike and how to pay less
Each block has limited capacity. During popular token launches, NFT mints or sharp market moves, many users bid for the same space and the base fee climbs block by block. Layer 2 networks bundle many transactions and post them to Ethereum together, which usually makes each one much cheaper.
Wallets estimate fees automatically. Setting a fee too low can leave a transaction pending for a long time; failed transactions still cost the gas they consumed.
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Frequently asked questions
Why did I pay a gas fee for a failed transaction?
Validators still did the computation up to the point of failure, so the gas used is charged even though the action did not complete.
Is gas paid in the token I am sending?
No. On Ethereum gas is paid in ETH, so you need some ETH in your wallet even to send a token like USDC. Other networks use their own native coin.
Do gas fees go to Ethereum developers?
No. The base fee is burned and the priority fee goes to the validator that includes the transaction.
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