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Gas fee

A gas fee is the cost you pay to perform an action on Ethereum, such as sending ETH or using a smart contract.

Last updated • 2 min read
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What is a gas fee?

Ethereum is a blockchain: a shared digital ledger that processes transactions. Every action on the network requires computing power. The gas fee pays for that work.

You pay the fee in ETH. It’s often shown in gwei, a very small unit of ETH. The busier the network is, or the more complex the action, the higher the gas fee usually is.

Part of the fee is the network’s fixed base fee. You can also choose to pay extra to have your transaction processed sooner. This extra payment is called a priority fee.

An example of a gas fee

You send ETH from your crypto wallet to someone else’s wallet. Ethereum processes the transaction, and you pay a gas fee in ETH.

If the network is very busy at the time, the fee may be higher. Using a smart contract usually requires more computing power than simply sending ETH, so that action can cost more.

Why are gas fees important in crypto?

Gas fees reward validators. Validators are participants who check and process transactions, helping secure the Ethereum network. Without this payment, they would have less incentive to do that work.

News about Ethereum may report rising gas fees when the network is busy. High gas fees don’t automatically mean that the price of ETH will rise or fall. They mainly indicate how much demand there is for space to process transactions on the network.

You may also see gas fees mentioned in news about Layer 2 networks. These networks bundle transactions before sending them to Ethereum. This can lower transaction fees within the Ethereum ecosystem.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.