What is gas on Ethereum? Fees, EIP-1559, and how to save money
Gas is Ethereum's unit for measuring transaction cost. Here's what gas is, how EIP-1559 changed it, and how to keep fees low with Layer 2s and better transaction timing.
- What it is
- Unit for measuring computational cost on Ethereum
- Paid in
- ETH (typically denominated in gwei)
- Gwei
- 1 gwei = 0.000000001 ETH
- Base fee
- Burned (EIP-1559, since August 2021)
- Priority fee (tip)
- Paid to validator
- Simple transfer
- ~21,000 gas units
Answer first
Gas is Ethereum's unit for measuring the computational cost of a transaction. Every operation on Ethereum — sending ETH, calling a smart contract, minting an NFT — consumes gas. You pay for that gas in ETH, typically quoted in gwei (1 gwei = one-billionth of an ETH). Since EIP-1559 in August 2021, part of every gas payment is burned (permanently removed from supply), which can make ETH net deflationary during periods of high network usage.
The gas formula, simply
Transaction cost = gas used × gas price
- Gas used depends on what the transaction does. A simple ETH transfer uses 21,000 gas. A Uniswap swap might use 200,000-400,000 gas. Minting an NFT can use 300,000+.
- Gas price is what you pay per unit of gas, quoted in gwei. When the network is congested, gas prices rise.
Multiply the two, convert to ETH, and you have your transaction cost.
EIP-1559 and the burn
Before EIP-1559, users bid gas prices directly. This was inefficient — users often overpaid or their transactions got stuck.
Since August 2021, each transaction has:
- Base fee — algorithmically determined by network demand. Adjusts every block. This portion is burned (permanently removed from ETH supply).
- Priority fee (tip) — an optional bonus you pay directly to the validator to prioritize your transaction.
The burn mechanism means active Ethereum usage reduces ETH supply. During busy periods (major protocol launches, NFT drops, market volatility), more ETH is burned than issued to validators — ETH becomes net deflationary.
How to save on gas
1. Use a Layer 2. Base, Arbitrum, Optimism, and zkSync execute transactions off Ethereum mainnet and post proofs back. Fees are typically 10-100× lower. If you're doing anything routine, do it on an L2.
2. Time your transactions. Gas prices fluctuate. Weekends and off-peak hours (typically overnight US-time) tend to be cheaper.
3. Set a lower gas price (if the transaction isn't urgent). Most wallets let you specify. The transaction will wait for gas prices to drop before executing.
4. Batch operations. Some protocols support batching multiple actions into one transaction, saving on the 21,000 gas base cost per transaction.
5. Use gas-efficient contracts. Some contracts (like Uniswap V3) are more gas-efficient than others. Newer implementations often improve on gas usage.
6. Avoid transacting during known high-demand events. Major NFT drops, protocol launches, and market crashes all spike gas prices materially.
Common gas costs (typical, 2026)
| Action | Gas used | Cost at 20 gwei |
|---|---|---|
| Simple ETH transfer | 21,000 | ~$1 |
| ERC-20 token transfer | 65,000 | ~$3 |
| Uniswap V3 swap | 150,000-300,000 | ~$7-14 |
| Add liquidity (Uniswap V3) | 250,000-450,000 | ~$12-20 |
| Mint NFT | 100,000-400,000 | ~$5-18 |
| Contract deployment | 500,000+ | ~$25+ |
Base fee has varied roughly 5-50 gwei in 2026 depending on network conditions. During peak demand, base fee can spike above 100 gwei briefly.
Related on CoinsCipher
Frequently asked questions
Why does Ethereum have gas fees?
What is EIP-1559?
How can I reduce gas fees?
What is gwei?
Sources
- EIP-1559 specification — accessed Sep 14, 2026
- Ethereum.org — gas and fees — accessed Sep 14, 2026