What to do if Ethereum transaction fees are too high? These 6 strategies will teach you how to save on Gas

This article is from Unitimes Unicorn Era, original title: "Ethereum Gas Fees Too High? 6 Major Methods to Save Gas!", author: William M. Peaster, editor: Nan Feng.

As the demand for Ethereum reaches new heights, the Gas prices have become unbearable. Paying so much Gwei every day can reduce your earnings, and for any crypto user actively using the Ethereum network, this can be a headache.

This article will explore some strategies you can take to lower and reduce your Gas fees.

Ethereum Gas 101 ⛽

Gas is a fundamental component of Ethereum. Simply put, it is the amount of ETH that users need to pay to perform activities on the Ethereum network.

From a more technical perspective, Gas is a unit of measurement used to track the computational cost of executing specific operations on Ethereum, which include sending ETH, trading DeFi tokens, minting NFTs, or deploying smart contracts, among others.

You might ask: why pay Gas fees? In fact, Gas fees play an important role in helping Ethereum run efficiently, as they prevent spam transactions and serve as rewards for miners who protect the Ethereum network (with the merge of Eth2, miners will soon be replaced by ETH stakers).

Gas is how you obtain decentralized computing on Ethereum, and it is also part of what makes this computing possible. Gas is priced in Gwei, 1 Gwei = 0.000000001 ETH (with 8 zeros after the decimal).

If you hear someone say "the Gas is 50 now," they mean that if you want to successfully complete a transaction on Ethereum at that moment, the expected Gas price is 50 Gwei (which means the price for 1 unit of Gas is 50 Gwei, or 0.00000005 ETH).

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Image source: ETH Gas Station

But this does not mean you can simply calculate your Gas fees by multiplying 50 by 0.000000001 ETH. This is where Ethereum's Gas Limit comes into play.

At the time of writing, Ethereum's Gas Limit (i.e., Gas restriction) is 15 million Gas, which is the maximum amount of Gas that can be used in a single Ethereum block (meaning the total amount of Gas for all transactions included in a single Ethereum block cannot exceed 15 million). There is also a Gas Limit for different types of individual transactions, for example, the Gas Limit for a basic ETH transfer is 21,000 Gas (of course, more complex operations require more Gas).

Therefore, to calculate the Gas fees for a specific Ethereum operation, we simply need to multiply the Gas Limit of the transaction by the current price per Gas. For example, if the current price per unit of Gas is 50 Gwei, and the Gas Limit for a simple ETH transfer is 21,000 Gas, then the Gas fee for this transaction = 21,000 * 50 * 0.000000001 ETH = 0.00105 ETH.

Why are Gas fees so high lately? 🤑

We must pay ETH (Gas fees) to use Ethereum's block space. With the rise of DeFi and NFTs, Ethereum's block space has become increasingly valuable, as there has been a surge in demand for block space recently.

As a result, Gas prices have skyrocketed to insane levels.

Above: As of May 18, the transaction fees of various blockchain networks over the past 24 hours (second column) and the average daily transaction fees over the past 7 days (third column), with Ethereum network's daily transaction fees ranking at the top.

This is because Gas prices are determined by the demand for block space, which is the result of a process similar to an auction, where users "bid" (i.e., set Gas fees) based on their willingness, and then miners prioritize and package transactions into blocks based on the users' bids.

Therefore, paying higher Gas fees gives you a greater chance of having your transaction processed quickly, so during times when many users are trying to obtain Ethereum block space, Gas prices will rise as people raise their willing "bids" (to have their transactions processed as quickly as possible).

Ethereum blocks are currently always full! This is the result of increasing demand for block space.

How to save on Gas fees on Ethereum?

Using Ethereum and trying out Dapps (decentralized applications) on the Ethereum application layer may be the most productive thing you can do right now.

However, due to the high demand for Ethereum recently, Gas fees are expensive, and many people have been scared away by the high prices.

Is there any good news? Ethereum is currently building and transitioning to scalability solutions, so the expensive Gas prices are not a concern indefinitely. However, during this current transition period of Ethereum, high Gas fees are an urgent issue.

Additionally, there are now a range of strategies and techniques that can significantly reduce your Gas spending. With some research and effort, you can quickly learn to pay Gas wisely when you want to use the Ethereum network, without spending too much ETH.

Let’s take a look at the best ways to save on Gas fees right now!

6 Major Ways to Save on Gas Fees on Ethereum

Optimize Your Transaction Timing

Depending on what is happening on the Ethereum chain and the different times people in various parts of the world are awake and active, Ethereum's Gas prices can fluctuate significantly throughout the day.

Above: Daily fluctuations in Ethereum Gas prices from May 17 to 23, showing significant volatility in Gas prices throughout the day. Image source: ethereumprice.org

Therefore, at certain times, the average Gas prices are generally lower. If you keep track of these times and use them as your trading times, it will be a great start to lowering Gas fees. So, when is the best time to trade?

Generally speaking, Gas prices are higher on weekdays and lower on Saturdays and Sundays, so a simple way is to batch your transactions over the weekend.

As for the actual times of day, a recent report from Paxful concluded:

(The Ethereum network's) busiest time, and therefore the most expensive time for (Gas fees), is from 8 AM to 1 PM (Eastern Standard Time). This is not surprising, as both Europeans and Americans are fully awake and working during this time. In contrast, the least busy time for (the Ethereum network) is midnight to 4 AM (Eastern Standard Time)—during this time, Americans are sleeping, Europeans are just starting their workday, and Asians are finishing theirs.

So there you have it—trading during these (less busy) time windows on the Ethereum network gives you a good chance of lower Gas fees compared to other times!

Use Ethereum Scaling Solutions for Transactions

The ecosystem of Ethereum's scaling solutions is still in its early stages, but some projects that are already online are impressive and improving daily. You can use these solutions to enjoy instant and ultra-cheap Ethereum transactions!

In this field, there are Layer 2 solutions, such as projects based on Optimistic Rollups or ZK-Rollups, which provide their own highly efficient infrastructure while inheriting all of Ethereum's security guarantees.

Then there are sidechains, like Polygon's PoS chain or xDAI, which are actually independent, efficient blockchains specifically connected to and catering to the Ethereum network.

In these Ethereum scaling solutions, you may only occasionally interact with the Ethereum main chain, while handling most of your cryptocurrency activities in L2 networks or cross-chain environments at affordable fees. So now is the time to familiarize yourself with these scaling solutions, even though they are still in early stages.

Last month, I wrote an article titled "7 Things You Can Do on Layer 2." If you want to dive deeper, this article is definitely a great starting point. The activities mentioned in this article include:

• Lending on Aave via Polygon;

• Trading perpetual contracts on dYdX via StarkEx;

• Trading DeFi tokens on DeversiFi via StarkEx;

• Earning SNX staking rewards via the Optimism network;

• Liquidity mining on Loopring via ZK-Rollups;

• Donating on GitCoin via zkSync.

Note: The Polygon, StarkEx, Optimism, ZK-rollups, and zkSync mentioned above are Ethereum scaling solutions.)

Use Gas Tokens

In short, you can mint Gas tokens when Gas prices are low and redeem them when Gas prices are high, allowing you to receive a refund in ETH, which helps offset your Gas fees.

Gas tokens are effective because of Ethereum's storage refund mechanism, which refunds Ethereum users who delete storage variables. This encourages people not to let Ethereum's state bloat. (Note: Ethereum provides refunds when you remove data from the blockchain to encourage users to store data more efficiently on the blockchain.)

Therefore, with Gas tokens, you can take a snapshot of Ethereum's state when Gas prices are low and then unlock that state when Gas prices are high to receive a refund in ETH. Voila! This allows for cheaper transactions.

However, Gas tokens can actually block Ethereum's state size, leading to inefficient Gas pricing, so they seem likely to be phased out in the coming years; you need to keep this in mind. In the meantime, they can lower your Gas fees, so don’t dismiss them now!

For example, a popular Gas token project is GasToken.io.

This project has two slightly different Gas token implementations, namely GST1 and GST2, but they work similarly. To use either of these tokens, you just need to navigate to their "Contract" page on EtherScan and call the "Mint" and "Free" functions. When you release these tokens, you will receive a refund in ETH that can be used to offset your Gas fees!

Use Dapps that Minimize Gas Fees

Some Dapps (decentralized applications) on Ethereum explicitly offer products that minimize Gas.

For example, Yearn's V2 vaults and KeeperDAO automatically batch users' transactions, allowing users to pay Gas fees together instead of manually paying them one by one, significantly reducing the Gas fees each user pays.

Another project to consider is the Balancer V2 trading protocol. The Balancer V2 version has made Balancer now a single large vault that will hold and manage assets from all different Balancer liquidity pools, making trading through Balancer cheaper in terms of Gas fees!

Using these Dapps that significantly minimize Gas fees is one of the simplest ways to save on Gas fees. You just need to know which applications are the most Gas-efficient!

Strategize Your Transactions with DeFi Saver

Can you test and simulate transactions without actually executing them, so you can understand and adjust how much Gas you will pay before incurring Gas fees?

Well, you can do this with DeFi Saver's new Recipe Creator and its Simulation Mode! For details, see here.

Here’s how the process works. You can use the Recipe Creator to arrange any type of Ethereum activity you want, and then run the Simulation Mode to test these activities without paying any Gas fees.

This system is not a direct way to save on Gas, but it is a method to adjust transactions that can help reduce Gas fees.

Image source: DeFi Saver

Use Applications that Refund Part of Gas Fees

Ethereum projects know that their users are currently suffering from high Gas fees. Therefore, some Ethereum projects are refunding part of the Gas fees to their users to alleviate this pain.

Earlier this year, Balancer launched a program where users trading through Balancer for certain trading pairs would receive BAL (the project's governance token) as a way to refund part of their Gas fees. This means that if you want to make DeFi trades, you might consider doing so through Balancer, as you can earn decent BAL tokens just by using this protocol for trading.

While these are new programs, so far, each program has been quite successful for various protocols. It wouldn’t be surprising if more protocols adopt similar plans in the future!

Conclusion

High Gas prices are not an eternal problem. With the arrival of Layer 2 scaling solutions and Eth2, Gas prices will significantly decrease in the coming year.

However, we do have to deal with high Gas prices at the moment. So the next time you need to make an Ethereum transaction, don’t trade blindly. Check what time it is now, or whether you can perform the same transaction through a scaling solution, and so on. By enhancing your understanding of how Gas is used, you can save a significant amount of ETH right now!