Definition
Gas fees compensate validators for the computational resources needed to process transactions. On Ethereum, gas is measured in "gwei" (billionths of ETH). Fees fluctuate with network demand—during peak activity, simple transfers can cost $50+ while complex DeFi transactions can exceed $200. Layer 2 solutions (Arbitrum, Optimism) reduce fees by processing transactions off the main chain.
functions Formula
Transaction Fee = Gas Used × Gas Price (gwei) × ETH Price
lightbulb Example
A Uniswap swap uses 150,000 gas. At 30 gwei gas price and $3,000 ETH: fee = 150,000 × 30 × 10⁻⁹ × $3,000 = $13.50. During network congestion at 200 gwei, the same transaction costs $90.
verified_user Key Points
- Compensates validators for processing transactions
- Fluctuates with network demand
- Ethereum gas measured in gwei
- Layer 2 solutions dramatically reduce fees