Gas fees pay for computation on a blockchain. Every transaction and every smart contract call costs gas. The more complex the operation, the more gas it consumes. A simple ETH transfer costs 21,000 gas. A Uniswap swap might cost 150,000 gas. A complex DeFi interaction can run into millions. Gas is priced in gwei, which is a tiny fraction of ETH. Multiply gas used by gas price and you get the fee.

Fees rise when the network is busy. Too many transactions competing for limited block space means users bid up the price. During NFT mints or token launches, gas can spike to hundreds of gwei. A transaction that costs a dollar on a quiet day can cost fifty during a rush. Ethereum's EIP-1559 changed the fee model. A base fee is burned, and users add a priority tip for faster inclusion. Layer 2 networks like Arbitrum and Optimism process transactions off the main chain and post compressed data back, which cuts fees dramatically. Gas fees are the tax you pay for decentralization. They are also the biggest barrier to mainstream adoption.

Gas fee mechanics

• Gas used — computational cost of the operation
• Gas price — how much you pay per unit of gas, in gwei
• Base fee — burned, adjusts with network demand
• Priority fee — tip to validators for faster inclusion

Check gas prices before transacting. A little patience can save a lot of money.