Fees & Networks

Why Are Gas Fees So High? (And How to Pay Less)

Gas fees fund the Ethereum network but can spike during congestion. This guide explains the fee mechanism (EIP-1559), why prices vary, and five ways to reduce costs — including Layer 2s.

6 min read
#gas-fees#ethereum#layer-2#costs

You tried to send $20 of ETH and the fee was $8. Or you went to swap tokens on Uniswap and MetaMask showed a $47 gas estimate. What gives? Gas fees are one of the most frustrating parts of using crypto, but once you understand why they exist and how to minimize them, they become manageable.

What Are Gas Fees?

Gas is the unit that measures how much computational work a transaction requires on the Ethereum network. Every operation — sending ETH, swapping tokens, minting an NFT, interacting with a smart contract — costs gas. You pay gas fees to the validators who process and confirm your transaction.

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Think of gas fees like postage stamps. Simple letters (basic transfers) cost less. Heavy packages (complex smart contract interactions) cost more. And when the post office is overwhelmed (network congestion), prices go up for everyone.

Why Do Fees Spike?

Ethereum can process about 15–30 transactions per second. When demand exceeds that capacity, users bid against each other to get their transactions included in the next block. The highest bidders get processed first; everyone else waits.

Common causes of fee spikes:

  • Popular NFT mints — thousands of people trying to mint at the same time creates a bidding war.
  • Market crashes — everyone rushes to sell or move funds simultaneously.
  • Memecoin launches — new token hype can spike gas 10-50x for hours.
  • DeFi liquidations — cascading liquidations during volatile markets create urgent transaction demand.

How Gas Pricing Works (EIP-1559)

Anatomy of a gas fee
Gas fee = (Base fee + Priority tip) × Gas used

Example: simple ETH transfer
  Base fee:     12 gwei (set by network, burned)
  Priority tip: 2 gwei  (goes to validator)
  Gas used:     21,000  (fixed for simple transfers)

  Total: (12 + 2) × 21,000 = 294,000 gwei
       = 0.000294 ETH ≈ $0.94 at $3,200/ETH

Example: Uniswap token swap
  Base fee:     12 gwei
  Priority tip: 2 gwei
  Gas used:     ~150,000 (smart contract is more complex)

  Total: (12 + 2) × 150,000 = 2,100,000 gwei
       = 0.0021 ETH ≈ $6.72 at $3,200/ETH

The base fee adjusts automatically based on network congestion. When blocks are more than 50% full, the base fee increases. When they're less than 50% full, it decreases. The priority tip is what you offer validators to prioritize your transaction.

How to Pay Less Gas

  • Use Layer 2 networks — this is the single biggest savings. Networks like Arbitrum, Optimism, Base, and Polygon process Ethereum transactions at a fraction of the cost. A swap that costs $8 on Ethereum mainnet might cost $0.02 on Base. See our network guide for details.
  • Time your transactions — gas fees are lowest during off-peak hours (weekends, late night US time). Tools like Etherscan Gas Tracker show real-time gas prices.
  • Set a custom gas limit — MetaMask lets you adjust the max fee you're willing to pay. If you're not in a rush, set it lower and wait for a less congested period.
  • Batch transactions — instead of 5 small transfers, do 1 larger one. Each transaction has a minimum gas overhead.
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On RentAHuman, payments can be sent on Layer 2 networks to minimize gas costs. If you're receiving frequent small payments, ask about L2 payment options to save on fees.

Why Gas Fees Are Actually a Good Thing

Gas fees serve two critical purposes: they prevent spam (attackers would have to pay to flood the network) and they compensate the validators who secure the entire system. Free transactions would mean an insecure network.

The good news: Layer 2 networks have made gas fees a non-issue for most users. The Ethereum roadmap (including "proto-danksharding" and future upgrades) continues to push L2 fees lower. We're heading toward a world where most transactions cost fractions of a penny.

Wondering which network to use for your next transaction? Our network comparison guide breaks down the options. And if your transaction is stuck, check our pending transaction troubleshooting guide.

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