With the demand for Ethereum skyrocketing recently, ETH gas prices have become a dilemma even for high-cost users. Imagine if we add up all the money from the gas fee every day, it could be a huge saving. So let’s learn some tips with CoinCu to minimize gas fees on Ethereum transactions!
What is the Ethereum gas fee?
Gas is a fundamental element of Ethereum. Put simply, this is the amount of ETH a user pays to perform an operation on the Ethereum network.
On a technical and deeper level, gas is a unit of measure that tracks the cost of performing calculations for a specific action on Ethereum, such as sending ETH, trading DeFi tokens, minting NFT works, or providing smart Contracts.
The current gas limit is 15 million units, which is an upper limit on the amount of gas that can be issued on an Ethereum blockchain. There is also a gas limit for individual transaction types, for example ETH basic transfers have a gas limit of 21,000 units.
Why are Ethereum gas fees always so “expensive”?
Users have to pay gas fees at ETH to access the Ethereum room. With a booming year for DeFi (2020-2021) and NFT projects, the Ethereum blockchain is becoming increasingly valuable as the demand has increased recently. As a result, gas charges have risen insane.
Paying higher gas fees gives us a better chance of completing a transaction quickly. At a time when a lot of users are trying to access Ethereum, gas prices will go up. The situation that Ethereum transaction fees are still “expensive” is now temporarily calming down due to the sideways market. Many questions arise that:
Binance Smart Chain (BSC) may be very fast, the fee is very cheap, but that means one hack a day, do you feel safe to put your full trust in BSC? Or Solana (SOL), who is an unstoppable horse despite the market storm, was postponed again on April 30, which worries the community.
Many other heavyweights are slowly emerging to replace Ethereum, but we have to admit that the Ethereum blockchain is the irreplaceable legacy of the cryptocurrency market. Going forward, gas fees will remain a major concern during the full upgrade transition from Ethereum. Hence, we need some necessary strategies to optimize these costs.
Strategies for fee optimization with Ethereum
Using Ethereum Layer 2 scaling solutions
Things are pretty early on in the Ethereum Layer 2 scaling solutions ecosystem, but the projects are already impressive and are improving every day. We can use these solutions to enjoy transactions on Ethereum with extremely low fees.
In the land of Layer 2, the potential transmission of the Ethereum blockchain legacy is highlighted by names such as Optimistic, ZK Rollups or Arbitrum and, above all, Polygon (MATIC), the cult name of recent times.
Polygon (MATIC) converges perfectly in every way – aura is only a matter of time
Layer 2 solutions offer their own super efficient infrastructure and inherit all security guarantees from Ethereum. In the long term, when everything is fully assembled, it is likely that we will not experience the current price range. So it is definitely a good time to familiarize yourself with these solutions while it is still relatively early.
Use Dapp to cut gas
We have Yearn V2 Vaults and KeeperDAO that automate and stack user transactions against each other so that we can all pay together instead of having to manually pay out users step by step, which significantly reduces gas costs.
Another project worth mentioning is Balancer V2. The V2 system now turns the balancer into a massive vault that significantly lowers gas fees for decentralized financial transactions (DeFi) as users can swap as much as they want and only pay for gas when entering and exiting the balancer.
We are happy to announce that Balancer V2 is live
Everything you need to know about the most flexible and efficient AMM ️https: //t.co/bVy7w8EGoq
– Balancer Labs (@BalancerLabs) May 11, 2021
Using applications with significant gas optimization in user contracts is one of the easiest ways to save on Ethereum transaction fees. You only need to take a moment to choose the solution that suits your “taste” and your plan.
Use gas tokens to save on gas fees
The gas token works thanks to Ethereum’s stored cashback system for users. This encourages people not to “take advantage of” the Ethereum platform.
You can mint gas tokens at low gas prices and redeem them at high gas prices, whereupon you will receive a refund in ETH to “cover” your gas costs. A popular gas token project is GasToken.io. The project has two slightly different implementations, GST1 and GST2, but both work similarly. Below is a comparative table of key features.
Learn more about how to get a value. Gas price volatility is the ratio between a high gas price and a low gas price (for example, if the price increases from 1 gwei to 100 gwei, the volatility is 100 times). Efficiency is the ratio between the amount of ETH Minting Gas tokens issued and the amount of ether saved through gas refunds.
To use any of these tokens, all you need to do is navigate to their contract page on EtherScan and run the Mint and Free functions. Whenever you release your tokens you will receive a refund in ETH.
The app offers gas discounts, why not?
Understand how difficult it is with high gas charges. Some offer their users this cost discount to make up for this “pain”. There are two projects that caught the eye, Balancer and Furucombo.
Earlier this year, Balancer launched a program to reimburse a portion of user gas fees for selected couples using BAL, the project’s governance token, to anyone trading through the balancer. That said, if we want to do DeFi transactions, we should do it through the balancer as we are only getting a decent amount of BAL for the transaction through the protocol.
Furucombo is currently running a gas refund campaign to distribute COMBO tokens to protocol users.
How do you use https://t.co/qT2OgVoXoY to collect your trade orders?
Here is an example:
1️⃣Securities (LP tokens) can be withdrawn from the manufacturer
2️⃣Remove liquidity from Uniswap
3️⃣Exchange funds into DEXs
Hol $ COMBO reimbursed as gas at the same time!Easy. Flexible. Efficient.#combo challenge pic.twitter.com/EOHKUXxV8E
– FURUCOMBO (@furucombo) June 12, 2021
This program of the project is very new, but so far successful for the respective protocols. It wouldn’t be surprising if more protocols adopted similar schemes in the future. This greatly promotes the reduction of gas costs in Ethereum transactions.
Optimize your trading time
Ethereum gas prices can fluctuate significantly during the day as different events play out and different regions of the world occur.
Hence, there are times when the average price of gas is usually lower. If we can project these timeframes and conduct targeted transactions, it will be a great solution on the path to reducing gas costs.
If we look at the graph above, we can easily see a pattern that weekday gas prices are higher on weekdays and lower on Saturdays and Sundays. So start doing transactions on the weekend to experience it.
Conclude
High ETH gas prices are not a “dangerous” concern in the long run, as these costs should decrease significantly in the coming years with the advent of Layer 2 scaling solutions and the upgrade from Ethereum 2.0.
However, in order to cope with the current problem of having to make an Ethereum transaction, we pay attention to the details so that we can save ourselves and become a perfect trader.
Marcus
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