Fees on the Ethereum Blockchain
Ethereum is a decentralized, open-source blockchain that is best known for its native cryptocurrency, ETH.
Whether sending tokens, interacting with a contract, or sending ETH or ERC20 tokens on the Ethereum blockchain, there is a fee called ‘gas’ associated with every transaction.
This transaction fee is paid only in ETH, which acts as the fuel for the entire Ethereum blockchain (and why it’s referred to as 'gas'). You can see your transaction fee in ETH and USD when you search for your transaction on a block explorer like Etherscan or EthVM.
Gas fees are crucial to maintaining the Ethereum network because they are paid to validators that are responsible for securing the blockchain and creating new blocks. The transaction fee depends on the overall volume of Ethereum traffic at the time of transaction initiation. The higher the network congestion – the higher the gas fees. MEW offers several automatic settings for gas fees. Choose a higher fee setting for faster transaction processing.
Please keep in mind that the transaction fee is required whether your transaction succeeds or fails. Even if it fails, the work of attempting to execute and validate the transaction still happens, which requires the work of validators.
If your transaction fails, it usually is due to the gas fee being set incorrectly. That’s why MEW calculates gas fees for users automatically to make sure that transactions have the best chance of being processed quickly.
Our partners allow MEW users to securely buy ETH directly from MEW wallet app, Enkrypt, and on MEW web. You'll just need to click where you see 'Buy ETH' and use your card to complete the process.
For MEW wallet uses specifically, users can click on the Gas tracker icon to check the most current gas fees. The Gas tracker icon is located at the top of the Wallet tab. It looks like a mini gas pump. If you don't have enough ETH, you can click 'Buy Ether' to replenish your wallet.
How Gas Works
As mentioned, transaction fees are affected by the volume of traffic at the time of initiation. The fee itself is the total cost of the transaction, which is simply the Gas limit * Gas price (the units of gas required by the smart contract * price per unit of gas). Units of gas depend on how many smart contracts are used and their complexity. That’s why just sending ETH requires less gas than swapping tokens or minting an NFT.
When completing a transaction, the transaction fee is already calculated for you. The fee is based on the minimum base fee plus tips for block creators which can be added on top of the base fee for faster processing.
MEW offers 3 options: Normal priority, Higher priority, Highest priority
Higher priority means more tip is added on top of base fee. Depending on how fast you intend to have the transaction process will determine which speed to use. If the transaction is time-sensitive, you'll most likely need to use a higher priority which would cost you a little more than the lower priorities. Normal priority works well for most transactions.
Diving Deeper into Gas calculations
The gas limit is called the limit because it’s the maximum amount of units of gas you are willing to spend on a transaction. This avoids situations where there is an error somewhere in a contract, and you end up spending 1 ETH, then 10 ETH, and then 1000 ETH, going in circles but arriving nowhere.
You can think of the gas limit as the total amount of liters/gallons/units of gas a car can hold. You can think of the gas price as the cost of that liter/gallon/unit of gas.
With a car, it’s dollars (price) per gallon (unit).
With Ethereum, it’s GWEI (price) per gas (unit).
The units of gas necessary for a transaction are already defined by how much smart contract code is executed on the blockchain. If the gas limit is set too low, the transaction will fail, and if the gas price is set too low, the transaction can be stuck pending for an indefinite amount of time.
You can use our tool to calculate GWEI <-> WEI <-> USD here, which can be helpful when you want to know your transaction fee in ETH, rather than GWEI.
Gas fees are too high for me. What can I do?
Transaction fees are calculated based on the volume of traffic at the time you’re trying to complete the transaction. Ethereum’s growing popularity can lead to high traffic volumes, which can temporarily raise the fees.
Here are some options for you:
Send the transaction with ‘Normal Priority’ if you’re not in a hurry. The transaction will be mined at a later time and it’s cheaper this way.
Wait and try to complete the transaction at a later time. The fees fluctuate over time so you can always return later to see if the fees have reduced.
Consider using Layer 2 and sidechain networks like BNB, Polygon, Optimism, Arbitrum, and others to avoid congestion and save money on the fees.
Will 'High priority' transaction fees be mined faster?
When a block is created, transactions with higher fees will give a higher transaction fee payment to the block creator. Therefore, transactions set as higher priority have a better chance of being sent sooner.
If you are in a hurry, choose the highest priority, so that you jump ahead of everyone in line. If you're not in a hurry, then you can set it for 'Normal' priority and it will eventually process.
Why would I want to set a 'Normal Priority' for my transaction fee?
Because it’s cheaper. Also with the increasing price of ETH (compared to USD) and the increased volume of traffic on the blockchain, transaction fees can be quite high. Therefore, if you're not in a hurry then 'Normal priority' should work just fine.
Where can I find the most current Gas prices?
Start here, at Etherscan’s Gas Tracker. Here, you can see the current base fee and approximate fees, in USD, for popular types of transactions.
What happens to the transaction fee if it fails?
Even if a transaction fails, the work of processing and validating the transaction still needs to happen and still requires gas, just like with a successful transaction.
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