There are more transactions on the Ethereum network lately. You can get above-average returns on DeFi investments. 20% annually on Yearn, 11% on Curve with the possibility of increasing the interest rate using CRV tokens to 27% per annum. Such smart contract deposits are available to any investor willing to learn. As a result, you pay more for ETH gas fees.
It is therefore important that the transaction fees are as low as possible. Lower costs will increase rate of return, since the fees reduce the final profit. How to save GAS fees on smart contracts? First, let’s look at the unit of account.
Where do you check Ethereum fees?
The most popular sites that display Ethereum transaction fees are:
- EthGasStation.info
- EtherScan.io
- EthGas.watch (with the useful table)
- Gas.wtf
- EthereumPrice.org
Each page has different functionalities such as historical prices, recommendations (slow, fast, immediate) or an explanation of the blockchain mechanisms.
What’s Gwei?
We calculate the transaction fees in Gwei. Wei is a fraction of Ethereum, more precisely 1 Ether is 1,000,000,000,000,000,000 Wei, or 10 to the 18th power. Due to the fact that cryptocurrencies are usually only 8 decimal places, not 18, as in the case of 1 Wei, we use Gwei (GigaWei), that is exactly 0.00000001 ETH. Gwei is referred to as Gas, but we’re still talking about the same cryptocurrency and its unit, which is Ethereum.
Suppose we send 0.1 ETH and decide to pay a maximum of 1 Gwei in fees. This means that we will send 0.1 ETH to the destination address, and 0.1 ETH (transferred funds) + 0.00000001 ETH (1 Gwei transaction fee) will disappear from our address, which is 0.10000001 ETH in total. In practice, to send the transaction, we need an address that has a bit more ETH than we intend to send. It is because the balance must be sufficient for the fee.
Ethereum’s gas price
Gas Price is nothing more than the gwei price that we are able to pay for the transaction. Although sometimes the service tells us that we have to pay over 100 gwei for the transaction to be successful, we strive to make it as low as possible.
There are times, when the network is not crowded, the price that is often enough is just 1 gwei. At times when the network begins to be overloaded, the best price we can achieve at night on weekends is 20-70 gwei. In times of high prices and popularity of cryptocurrencies, we can pay 100-150 gwei and we have to wait even a few days for a better price or for the transaction to complete.
What is Gas Limit?
The Gas Limit, or Gas Limit, determines the maximum amount of gas that the transaction will consume. The standard amount is 21,000 and this is what wallets often propose. The network tells the wallet how much is actually required.
It is important because a limit that is too low will result in the trade being unsuccessful. If we set the price too low, we still have a chance of success when the gas fees are low, however. If the network requests less than the limit for our transaction, the remaining amount will be refunded. It is worth knowing the difference between the gas limit and the gas price!
Complex operations will use more gas and hence the wallet will set a larger limit. We will pay the least for sending ETH to another address. We will pay additional amount if we send the metadata.
It will cost even more to call a function in a smart contract. We will pay the most for the execution of smart contracts: the more complex, the more charge. In such case, the gas limit may be as high as several hundred thousand, compared to the standard twenty-one thousand.
Therefore, for safety reasons, if we do not know what is happening “under the hood”, it is worth leaving the Gas Limit at the level proposed by the wallet. You will just pay recommended gas fees.
Choose your trading time wisely
Where possible, trades should be conducted on non-crowded hours and days. Thus, these are late night hours in time zones where there are active investors in projects: Uniswap, Tether and other large protocols (these are the largest network users). There are also lower ETH gas fees on weekends, especially in the morning European time.
Large market events, such as token issues, interest rate promotions, project debuts attract large amounts of buyers and clog the network, generating very high fees. It is worth avoiding these periods.
One of the most important ways, but still unknown to a wider audience, is to choose the time of the transaction. Extensive research has shown that it is much better to send a transaction … in the last minutes of every hour. So it turns out that it is better to send the trade at 12:49 instead of 12:05 or 7:51 instead of 7:00. Big data allows you to look for even such dependencies.
How to send an Ethereum transaction and not overpay for gas fees?
The easiest way to send Ethereum or ERC-20 tokens is the MetaMask browser wallet. The transaction fee changes along with the demand for the availability of the Ethereum blockchain.
If the demand is very high, the transaction fee can be as high as over 100 Gwei. This translates into a transaction gas fee of over $10, and in the case of smart contracts, several dozen dollars. Such large amounts can make investments no longer profitable.
What is the gas payment scheme in Ethereum? Priority Fee and Gas Price
The most popular source of information is EthGasStation. We recommend using also EtherScan’s GasTracker. Schema consists on two elements:
- firstly, define the amount of Priority Fee (usually in the amount of a few gwei),
- then, determine the amount of the fee in gwei Gas Price, as we have done so far
Thanks to the new method, you are able to more accurately determine the amount of gas fees and more effectively estimate your expenses.
We can see the difference between the quick confirmation of the transaction (7 Priority Fee, Gas Price 121) and the low one is similar to the previous method of calculation.
We have a similar interface on the EtherScan website, only the price of Gas is exposed, and the priority fee is hidden. We have marked these places for Low Fee, which interests us the most from the point of view of savings of gas fees.
How to save more on gas fees with the MetaMask wallet?
How to manually configure the wallet fees? When you start an Ethereum transaction, Metamask recommends the appropriate minimum fee in advance.
Most often it is at the average fee level, so we can safely set less gas fees and save. The interface looks similar to the recommendations of EthGasStation and EtherScan.
Gas Limit should not be changed because it is set based on the operations we want to perform on the blockchain.
We have marked the place to enter the recommended, low Priority Fee and the lower Gas Price. Then click “Save” to let MetaMask remember our rates, go back to the transaction window and confirm it.
To get technical details on gas fees, you can read the EIP-1559 implementation to get to know the Ethereum transaction even better.
- Base Fee is burned, giving Ethereum a chance to become a deflationary currency
- Max Priority Fee in MetaMask is a miner tip. The more we pay, the greater the chance we have for quick transaction.
- Max Fee includes the maximum fee we are going to pay. Usually we will pay less (50% -70% of the value estimated by the wallet, e.g. MetaMask).
- Users therefore do not set the amount of their fees, but say how much they are able to pay up to the maximum. The base fee is determined by the protocol.
- The old “bidding of the highest fees” to encourage miners can also be used, especially when network is clogged. Queue will then be defined using the increasing Base fee.
How to speed up Ethereum transaction?
If we wanted to save too much and set the limit too low, our transaction may not go through. It’s common for a low limit transaction to hang in pending, even for days. The transaction may be rejected at some point (e.g. timeout), however, it depends on the configuration of the nodes that broadcast it.
Accelerating the transaction requires increasing the fee to level up its priority. To speed up the transaction, select it from the Activity list in MetaMask, and then click “Speed Up”.
Then, confirm how much more you are willing to pay for the transaction. Then, you are still waiting, hoping that the higher amount will speed up its processing.
When we check the status of the transaction in EtherScan, we discover that the original transaction has been overwritten. However, it is technically possible that a transaction will either be processed against a pre-set fee or be rejected by some nodes.
Most often, however, “Speed Up” allows faster processing. What also works is waiting for a less crowded time, night hours in places where ETH is most popular or no major network events.
How to fix an Ethereum transaction when it is pending too long?
Sometimes we speed up your MetaMask wallet transaction and the transaction fees keep rising. We can then wait indefinitely for the transaction to be completed. There are transactions in the network that are waiting for execution for several months. What can you do then? There is an option to manually overwrite transactions in the MetaMask wallet.
In order to start overwriting transaction, we need to enable the manual setting of Nonce in the MetaMask wallet. To do this:
- click on the wallet icon, then select “Settings”
- go to the “Advanced” section
- select “Customize transaction nonce” and move the slider so that the option is on
After configuring setting of Nonce in the wallet, we can start overwriting the transaction.
We check the Nonce number of a transaction that is waiting too long. We will have to enter it in the new transaction. Then, we repeat all the steps (address, amount, etc.).
We set a higher gas fees limit so that the transaction can be processed in the current market conditions. We fill in the same Nonce number in the newly added field and confirm the sending of the transaction. We hope that the new transaction will be completed faster and that we will get rid of the problem with the old one.
The ability to wisely choose rates for Ethereum fees is especially useful when investing in DeFi. Smart contract fees are much higher than sending common tokens. In the long term, every dollar you save increases the rate of return on your digital asset investment.