One of the most important factors to consider in any NFT transaction is the NFT gas fees. These are one of the strangest types of additional fees in the industry. Plus, they’re very confusing!
But, that’s why we’re here: to clear any possible misconceptions and confusion on the matter. AND, to save you money while doing it. You see, if you don’t really understand what you’re doing when it comes to these charges, you’ll waste crypto-cash! We’re not about to let something like that happen on our watch. NFTs don’t come cheap, so every little crypto penny counts.
Therefore, if you’re planning on ever buying or selling NFTs or just even minting, you need NFT gas fees. Well, you’re going to have to pay them. So, here’s everything you need to know about how they work, calculating them, and even reducing them!
WHAT ARE NFT GAS FEES?
Imagine you were standing in line outside your local Foot Locker trying to buy a sneaker. You look ahead, and you find that there are 5 people in front of you in line. So, you try to gauge approximately how long it will take for it to be your turn! BUT, you just happen to know one of the workers in the store. You slip them $20 bucks, and you go ahead to pay $100 for your shoes. Bringing your total to $120.
But, what if there were 300 people standing in line to buy a super hyped sneaker instead. It would be so much more difficult for the worker to get you in, especially not for $50! All of a sudden, you find that you have to slip the worker $100 to buy the $220 shoe! Or else, you’re going to have to wait for all the 300 people to pass through. Bringing your total to $320. HOWEVER, someone else up the line offered to pay $150, and got in before you!
– You pay NFT gas fees to perform ANY action on the Ethereum network
– The more people (traffic) there are, the higher the fees
– ALSO, the more money you’re willing to slip the worker, the faster you get in!
Let’s apply this to Ethereum cryptocurrency and NFTs!
NFT gas fees fuel everything that happens on the Ethereum network. You can imagine it as the actual power that keeps the network up and running. The workers in the Foot Locker are the miners on the Ethereum network.
These fees are usually a fixed amount depending on the transaction. However, gas prices definitely change depending on the type of transaction! So, to find out how much NFT gas fees cost per transaction you have to do the following:
GAS COST x GAS PRICE
Gas Cost is a constant number equal to 21,000 units of gas.
Gas Price is a variable value that comes in the form of Gwei – which stands for Giga Wei. To better understand what a Wei is, you have to imagine it like a penny to a dollar. SO, 1 Wei is one-quintillionth of an ETH – a ridiculous number! Therefore, we use Giga Wei and 1 Gwei is equal to 0.000000001 ETH.
To get a better understanding of NFT gas fees, we’ve prepared to separate case scenarios that you could face.
Imagine one of the most basic Ethereum actions you could do on the Ethereum network: sending money to someone else! This is considered a single transaction and it requires three factors:
1. Gas cost = 21,000 gas
2. Price of Ethereum which, at the time of writing, is at $1,805.03 according to CoinGecko
3. Gas price: the higher you set it, the shorter the transaction time. Let’s assume for now that the average gas price is 100 Gwei
➟ Transaction Price = 21,0000 x 100(0.000000001) = 0.0021 ETH
If you want to convert that to US dollars, it would amount to [$3.79]. This means that to make a transaction, you will have to pay $3.79! This is the same process you would do to find out how any action on the Ethereum network would cost – aka the NFT gas fees!
Imagine the same transaction, but for this case, we’ll assume that the Ethereum network is very busy. This means that there are a lot of people performing multiple actions all across the globe on the same network. We call this traffic or a congested network! Ultimately, the average Gas Price increases to 700 Gwei for this example. Therefore, the same transaction price would thus become:
➟ Transaction Price = 21,0000 x 700(0.000000001) = 0.0147 ETH
If you want to convert that to US dollars, it would amount to [$26.5]! The exact same transaction! And you have to keep in mind that this transaction does not depend on how much money you’re sending out. To make things even easier for you, you can check out ethgasstation.info or etherscan.io/gastracker to check.
HOW TO REDUCE NFT GAS FEES
– Use simulation to reduce NFT gas fees like the DeFi Saver app
– Pick the right time by checking Ethereum Gas Charts for low gas prices
– Perform similar types of transactions together to save gas fees
– Don’t perform transactions when the network is congested unless you absolutely have to!
– Choose projects that offer lower gas fees or different blockchains – Ethereum vs Solana debate
– Explore Ethereum Layer-2 scaling solutions
So, what happens when the Ethereum network is congested? Well, NFT gas fees skyrocket as we’ve explained before. A lot of people cram to get their transactions done before anyone else’s. In other words, paying more money so that miners prioritize their transactions – an action basically. THIS is called gas wars.
Gas wars most commonly happen during a new NFT release and people try to get initial mints! Especially for huge, blue-chip projects or maybe other celebrity-endorsed collections.
How to Win Gas Wars:
– Before the actual mint, open the official drop site
– Find and open the drop’s contract on Etherscan
– Check current gas fees on online platforms
– Once minting opens, mint directly from the website
– When the MetaMask transaction page opens, edit the estimated gas option
– Enter the FAST or RAPID gas price from the website or a bit higher
If the FAST gas fee increases more than what you input, go to pending transactions on your wallet. From then, increase the NFT gas fees.