Question 1

How do Ethereum gas fees work?

Accepted Answer

Ethereum gas fees have two components since EIP-1559: a base fee (burned, determined by network congestion) and a priority fee (tip paid to validators). You pay gas price × gas units used. Simple ETH transfers use 21,000 gas units; complex DeFi transactions can use 200,000+ units. During congestion, the base fee rises exponentially — a block that is 200% full doubles the base fee for the next block.

Question 2

How can I reduce gas fees on Ethereum?

Accepted Answer

Four strategies: (1) Time your transactions — gas is cheapest on weekends and late weekday nights UTC when US and European users are offline. (2) Use L2s — Arbitrum, Optimism, and Base cost 10-100x less than Ethereum mainnet. (3) Batch transactions with protocols that support multicall. (4) Set a low max fee and priority fee during off-peak periods and wait for inclusion.

Question 3

What is the difference between gas limit and gas price?

Accepted Answer

Gas limit is the maximum units of computation you authorize for a transaction. Gas price (or max fee per gas in EIP-1559) is how much you pay per unit. Total cost = gas used × gas price. If your gas limit is too low, the transaction fails but you still pay for gas consumed up to the failure point. Always set the gas limit 20-30% above estimated usage to avoid out-of-gas errors.

Question 4

Are Layer 2 gas fees really that much cheaper?

Accepted Answer

Yes, dramatically. An ETH transfer costs ~21,000 gas at ~$2-5 on Ethereum mainnet during normal congestion. The same transfer costs $0.001-0.05 on Arbitrum or Optimism. Uniswap swaps cost $5-50 on mainnet and $0.05-0.50 on L2s. The savings compound for complex operations — a Uniswap v3 LP position that costs $80 mainnet costs under $1 on Arbitrum.

Question 5

How does EIP-1559 affect gas fees?

Accepted Answer

EIP-1559 replaced the first-price auction model with a base fee + priority fee mechanism. The base fee is algorithmically adjusted each block based on how full the previous block was — it targets 50% block utilization. The base fee is burned (removed from supply), while the priority fee goes to validators. This makes fees more predictable: you can set a max fee and trust the transaction will confirm when the base fee drops below it, rather than needing to guess the current market rate.

Ethereum Gas Estimator

Gas Cost Calculator

Common Transaction Cost Comparison

When to Use L2 vs Mainnet