With the demand for Ether at record highs, the price of Ether Gas is already making people swallow their tears. Paying this much Gwei every day can reduce your earnings, which can be a headache for any crypto user actively using the ethereum network.
This article will explore some of the strategies you can take to lower and reduce your Gas fees.
Ether Gas 101
Gas is a fundamental component of Ether. Simply put, it is the amount of ETH a user needs to pay to perform activities on the Ether network.
On a more technical level, Gas is a unit of measurement used to track the computational cost of performing specific operations on Ether, such as sending ETH, trading DeFi tokens, minting NFTs, or deploying smart contracts, among others.
You may ask: Why pay Gas fees? In fact, Gas fees play an important role in helping Ether run efficiently, as they prevent spam transactions and are paid as compensation to miners who protect the Ether network (with the Eth2 merger, miners will soon be replaced by ETH pledgers).
Gas is how you get decentralized computation on Ether, and it’s part of what makes it possible. gas is denominated in Gwei, 1 Gwei = 0.000000001 ETH (8 zeros after the decimal point).
If you hear someone say “Gas is now 50”, what they mean is that if you want to successfully complete a transaction on Ether right now, the expected price of Gas is 50 Gwei (i.e. the price of 1 unit of Gas is 50 Gwei, or 0.00000005 ETH).
Image source: ETH Gas Station
But that doesn’t mean you can simply multiply 50 by 0.000000001 ETH to calculate the Gas fee you’ll pay. This is where Ether’s Gas Limit comes into play.
At the time of writing, Ether’s Gas Limit (i.e., Gas limit) is 15 million Gas, which is an upper limit on how much Gas can be used in a single Ether block (i.e., the amount of Gas for all transactions contained in a single Ether block cannot exceed 15 million combined). There is also a Gas Limit for different types of individual transactions, for example, the Gas Limit for a basic ETH transfer is 21,000 Gas (of course, other more complex operations require more Gas).
So, to calculate the Gas cost for a certain Ether operation, we just need to multiply the Gas Limit of the transaction by the current price per Gas. For example, if the current price per unit of Gas is 50 Gwei, and the Gas Limit for a simple ETH transfer is 21000 Gas, then the Gas cost of the transaction = 21000 * 50 * 0.000000001 ETH = 0.00105 ETH.
Why is Gas so expensive these days? ️
We have to pay ETH (Gas fee) to use the block space in Ether. With the rise of DeFi and NFTs, Ether’s block space has become increasingly valuable because of the recent surge in demand for block space.
The result is that Gas prices have soared to insane levels.
Above: Transaction fees for the last 24 hours (second column) and average daily transaction fees for the last 7 days (third column) for the major blockchain networks as of May 18, with the Ether network topping the list of daily transaction fees.
This is because Gas prices are determined by the demand for block space, the result of an auction-like process in which users “bid” (i.e., set Gas fees) as they wish, and then miners sort and pack the transactions into blocks based on their bids.
So paying a higher Gas fee gives you a better chance of getting your transactions processed quickly, so during periods when a large number of users are trying to get space on an Ether block, the Gas price goes up as people raise the “bid” they are willing to pay (to get their transactions processed as quickly as possible).
Ether blocks are full all the time now! This is the result of people’s growing demand for block space.
How can I save on Gas on Ether?
Using Ether and trying out Dapps (decentralized applications) on top of the Ether application layer is probably the most productive thing you can do right now.
However, since demand for Ether is so high these days, Gas fees are expensive and many people are scared off by the high price.
So what’s the good news? Ether is currently building and transitioning to a scalable solution, so expensive Gas prices are not some indefinite concern. But while Ether is still in its current transition period, the high cost of Gas is an immediate concern.
Furthermore, there are a range of strategies and techniques available to significantly reduce your Gas expenses. With some research and work, you can quickly learn to pay for Gas wisely and stop spending too much ETH when you want to use the ethereum network.
Let’s take a look at the best ways to save money on Gas right now!
Top 6 Ways to Save Gas on Ether
- Optimize your transaction time
Depending on what’s happening on the ethereum chain and when people wake up and are active in different parts of the world, the price of ethereum Gas can fluctuate significantly during the day.
Above: Intraday fluctuations of Ether Gas price from May 17 to 23. Source: ethereumprice.org
As a result, at certain times, on average, Gas prices are usually lower. If you take stock of these times and use them as trading times, this would be a good place to start to reduce Gas fees. So, when is the best time to trade?
Generally speaking, Gas prices are higher on weekdays and lower on Saturdays and Sundays, so an easy way to get started is to start batching your trades on the weekends.
And as for the actual intra-day times, a recent report by Paxful gives the following conclusions.
The busiest time (for the ethereum network), and therefore the most expensive time (for Gas fees), is from 8am to 1pm (EST). This is not surprising, as both Europeans and Americans are fully awake and working during this time. By contrast, the least busy time (for the Ethernet network) is from midnight to 4 a.m. (EST) – a time when Americans are sleeping, Europeans are just starting their day, and Asians are finishing theirs.
So that’s it – trade during these windows of the day (when the Ethernet network is not busy) and you stand a good chance of having lower Gas fees than at other times!
- Trading with Ethernet Scaling Solutions
The ecosystem of scaling solutions for Ether is still in its early stages, but some of the projects that are already live are impressive and improving every day. You can use these solutions to enjoy instant and super cheap ethereum transactions!
There are Layer2 solutions in this space, such as projects based on Optimistic Rollups or ZK-Rollups, which offer their own super-efficient infrastructure while inheriting all the security guarantees of Ether.
Then there are sidechains, such as Polygon’s PoS chain or xDAI, which are actually standalone efficient blockchains, but specifically connect and cater to the Ether network.
In these ethereum scaling solutions, you may only occasionally interact with the main ethereum chain, but instead handle the majority of your cryptocurrency activity in an L2s network or cross-chain environment at an affordable cost. So now is a good time to familiarize yourself with these scaling solutions, although these things are still in the early stages.
Last month, I wrote an article about 7 Things You Can Do on Layer 2. If you want to dive in, this article is definitely a good starting point. The activities covered in this article include.
Lending on Aave via Polygon.
Trading perpetual contracts at dYdX via StarkEx.
Trading DeFi tokens at DeversiFi via StarkEx.
earning SNX pledge rewards through the Optimism network.
liquidity mining at Loopring via ZK-Rollups.
Donating on GitCoin via zkSync.
(Note: Polygon, StarkEx, Optimism, ZK-Rollups, and zkSync mentioned above are all Ethernet scaling solutions)
- using Gas tokens
In short, you can mint Gas tokens when the Gas price is low and then redeem them when the Gas price is high, at which time you can get an ETH refund to help you compensate for the Gas cost.
Gas tokens work because of Ether’s storage refund mechanism, which refunds Ether users who delete stored variables. This encourages people to keep the state of Ether from inflating. (Note: To encourage users to store data more efficiently on the blockchain, Ether offers a refund when you remove information from the blockchain)
So with Gas tokens, you can get a snapshot of the state of Ether when the price of Gas is low, and then unlock that state when the price of Gas is high to get an ETH refund. Voila! This allows for cheaper transactions.
But Gas tokens can actually block the state size of Ether, leading to inefficient Gas pricing, so they appear to be on their way out in the next few years, and you need to keep that in mind. In the meantime, they can lower your Gas fees, so don’t dismiss them now!
For example, a popular Gas token project is GasToken.io.
This project has two slightly different Gas token implementations, GST1 and GST2, but they work in a similar way. To use either of these tokens, you simply navigate to their “Contract” page on EtherScan and call the “Mint” (casting) and “Free” (free) functions. Free” functions. When you release these tokens, you will receive an ETH refund that can be used to reimburse you for your Gas costs!
Use Dapps that minimize Gas fees
Some Dapps (decentralized applications) on Ether explicitly offer Gas minimization products.
For example, Yearn’s V2 machine gun pool (vaults) and KeeperDAO automatically batch user transactions so that instead of manually paying Gas fees one by one, users can pay Gas fees together, which greatly reduces the amount of Gas fees paid by each user.
Another item to consider is the Balancer V2 transaction protocol, which now makes Balancer a single large vault that holds and manages assets in all of the different Balancer liquidity pools, making the Gas fees for transactions through Balancer is now cheaper to trade with!
Using these Dapps that significantly minimize Gas fees is one of the easiest ways to save on Gas fees. You just need to know which apps are the most gas-efficient!
Develop strategies for trading with DeFi Saver
Can you test and simulate trades without actually executing them so you can see and adjust how much you’ll pay for Gas before you pay for it?
Well, with DeFi Saver’s new Recipe Creator and its Simulation Mode, you can!
Here’s how the process works. You can use Recipe Creator to arrange any type of Ether activity you want and then run Simulation Mode to test those activities without paying any Gas fees.
This system is not a direct way to save Gas, but it is a way to tweak transactions to help reduce Gas fees.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/6-ways-to-save-gas/
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