NFT Gas Fees Explained (& How To Avoid Them!)

You want to mint the latest, greatest, most exciting new NFT. But when it comes to to sign the transaction and close out the mint or auction, you realize that in addition to the purchase price (say, 0.08Ξ ETH), you owe upwards of 0.1Ξ ETH for something called “gas”. Woah. What is Ethereum gas? How is a transaction fee more expensive than the good that you are purchasing? We’re here to help you understand.

Contents

1 What is a gas fee for NFT?
- 1.1 Why Do NFTs Need Gas?
- 1.2 What is Gwei?
2 How is gas fee calculated?
3 NFT Gas Fees Explained

What is a gas fee for NFT?

Gas refers to a unit of measurement that represents the computational effort required to perform operations on the Ethereum network. The unit of ethereum gas cost is called Gwei. So, a gas fee is an additional cost to execute a transaction. Think of it sort of like the cost of putting fuel in your car for a trip. But why does Ethereum gas exist?

Why Do NFTs Need Gas?

NFTs do not need gas to exist. Transactions involving NFTS (buying/selling NFT art) or potential modifications to the NFT. Unused Gas is returned to the user as gas at the time of transaction is an estimate.

In the NFT world, gas serves two main purposes:

Incentive for validators. Ethereum is a global computer, with all transactions being validated multiple times across Ethereum nodes. The gas fee goes toward payment for participation as a validating node in the Ethereum network.
Security. If transactions were free, it would be really easy and without consequence for someone to perform a distributed denial of service (DDoS) attack, or just get stuck in an infinite loop accidentally. Or just have sloppy code running that burns resources inefficiently. A gas fee ensures efficiencies and helps to prevent intentional or accidental code catastrophes.

What is Gwei?

Gwei is short for gigaWei, with a Wei being the smallest unit of measurement on the Ethereum blockchain. Gwei is sometimes called nanoeth. Think of Gwei like pennies to the Ethereum dollar. Gas is calculated in Gwei because many times the gas fees are so small, it would be impractical to measure them in ether.

How is gas fee calculated?

Several factors go into determining the cost of gas for any given transaction.

Demand at a given time affects the cost of ETH gas fees greatly. If there is high demand for blockspace – that is, many people using the Ethereum blockchain at the same time – gas fees can skyrocket.
The size of the contract to be executed affects ETH gas fees – the larger the contract, the higher the fees.
The need for speed can raise or lower gas fees for a transaction. If a user is willing to wait longer for transaction to go through, gas fees will be lower. If a user wants a transaction to execute immediately, the gas cost will be higher.

Why are NFT gas fees so high?

As more and more use cases for Ethereum pop up, there will be more demand for blockspace (what Ethereum sells to store & validate the transactions). NFTs have been around for a few years, but with major IP-holding entities like Disney getting into the mix, there will be an increase in gas fees.

Layer 2 chains (more on these below) are one way to mitigate this upward pressure on gas costs. New technologies like sharding and proof-of-work are on the horizon to be incorporated into Ethereum. Zero Knowledge roll-ups represent another promising technology to enable higher throughput for Ethereum.

Is Gas A Problem For Artists?

If you want to allow users to mint an NFT for a small fee, gas prices that are higher than the fee can drive users away. The same goes for auctions, where for a new artist who’s work is selling for <1ETH, the gas fee could be higher than the cost of the work and therefore turn potential fans away.

NFT Gas Limits

No one likes extra fees, and Ethereum gas fees are no different. So how can you estimate gas costs and what is the Gas Limit?

The amount of gas you spend on a transaction is to some extent up to you. There will be a floor cost to execute a particular contract that is based on the amount of traffic occuring. You can also pay more in gas to ensure a transaction runs quickly.

In one recent extreme NFT gas situation, a cryptopunk was listed for an incorrect amount. A bot executed a transaction for 3.3Ξ ETH so that the new owner could buy the cryptopunk NFT for 4.444Ξ ETH instead of the owner’s intended 4444Ξ ETH+. So the new proud owner paid a total of 7.4Ξ ETH with 3Ξ ether being gas costs.

NFT Gas Solutions: Can I sell NFT without a gas fee or with a minimal fee?

We have a shortlist below, but the best way right now to avoid high gas fees is by using a Layer 2 (L2) sidechain such as Polygon or Optimism. NFT marketplaces like OpenSea now support some L2s, specifically Polygon in the case of OpenSea. See our guide on what wrapped ETH is and how to use a side chain here.

Be careful though: not all side chains are created equally. For example, Optimism is based on what is called an “optimistic rollup”. A very abbreviated explanation of how this works is that Optimism sacrifices security in the name of speed, with one result being potential long wait times to move your ETH from the L2 back to the L1 Ethereum mainnet.

We are not advocating for one side chain or another; each has pros and cons. Polygon follows a different implementation philosophy and you may find it faster to shift funds out of some L2s as needed. There are also new solutions emerging, such as Hop, that enable transfer of assets across L2s.

How to Avoid Paying High Gas Fees:

Use Layer 2 sidechains. Hands-down, this is the easiest way to avoid high gas fees (varies based on side chains and how fast the user needs to transact). Some NFTs may only be available on a particular side chain, so it is beneficial to get used to navigating them.
Timing. You may not always have control over timing (if there is a super-exciting mint going on, you may have to just eat the gas). But if you can find a less busy time to process your transaction, this will be beneficial.
Combine transactions. Any time you can package up more than one transaction in the same go, you win.
Use gas tokens – but at your own risk! This is a way of tokenizing gwei (the unit of ethereum gas cost) and optimizing the cost for users. As always, read the protocol and know how it works before you put money into it.
Switch to a L1 blockchain with lower fees. We don’t advocate for this, as we’re philosophically Ethereum maximalists. But other chains do exist. It is even possible that at some point there will be more cross chain transactions. As it stands now, most NFTs are handled by the Ethereum mainnet or a L2 sidechain such as polygon. So the NFT you want is likely not purchasable (yet) on another Layer 1 blockchain.

NFT Gas Fees Explained

We’ve explained why Gwei exists and how NFT gas fees are calculated. We’ve given you an overview of Layer 2 alternatives to the Ethereum main net and provided tips on how to avoid high Ethereum gas costs. Now, go forth and enjoy the bounty of NFTs available and the rest of the blossoming crypto world!