Understandably most people new to this space and Ethereum, are raging and fearful with the current gas fees (transaction fees), having sky-rocketed lately. Yes, we are frequently seeing 100 – 300 gwei resulting in 50-150 dollar prices on Ethereum’s Mainnet (Layer 1) at rush hour!
This post will help you out!
Mainnet: Why the gas fees are high? Mainnet: How can I pay the LEAST POSSIBLE on Ethereum Mainnet? How solve this problem, by moving from Ethereum’s Mainnet to Layer 2’s (L2), Side Chains or Helper Chains that most “veterans” have been using for DeFI and transactions for months. Examples are: Polygon, Fantom, xDAI, Optimism and soon Arbitrum. (Polygon and Fantom not being “true The amazing tech being finished on Ethereum’s Layer 2 (L2) Rollups.
1) Why are gas fees high?
Right now, Ethereum can handle about 30 transactions per second (TPS) at best; Visa, by contrast, does about 1,700 transactions per second and claims it can handle up to 24,000. Currently, due to the massive usage (success/adoption) of Ethereum being used for DeFI, NTFs mints (crazy shit), transactions by retails, institutions and exchanges the gas fees are rocketing in periods. This is bad for us “small fish”, leading to fees higher than some of us have in our wallet! While we wait for the “Merge” of ETH 2.0’s Beacon Chain (live since December) with current Mainnet, that will lead to Proof of Stake and giving us higher TPS, Scalability, Security and Sustainability, we have to look at other tricks and solutions. Besides, I suspect the completion/integration of Sharding to take longer than expected.
2) How can I pay the least possible gas on Ethereum Mainnet?
Use a Gas Tracker to see the current estimated gas price for a fast, average or slow transaction, BEFORE transacting. If you are using e.g. Metamask, you can Edit Gas Price if it is set too high or if you believe it will drop. Careful: If you set it too low, there is a risk it wont go through, and you got to pay MORE to speed it up. In my experience the gas is LOWEST in the mornings at 6-10 UTC (US night time), or especially in Weekends. If your transaction is not urgent, WAIT for the time when it drops back to like 20-40 gwei!
3) Make the move form Ethereum Mainnet (Layer 1) to a Layer 2 or Sidechain:
Layer 2: Is a collective term for solutions designed to help scale Ethereum by handling transactions off the Ethereum Mainnet (Layer 1), while taking advantage of the robust security of Mainnet. Sidechain: A sidechain is a separate blockchain which runs in parallel to Ethereum Mainnet and operates independently. Moving to the currently most used solution, Polygon (MATIC), will for many be like being born anew (seriously, here is my reaction/post 4 months ago). Transactions cost average $0.0007 and takes 1-3 seconds (unless rush hour). Polygon currently already has most big DeFi dApps like OpenSea (NTFs) Sushiswap, 1inch, AAVE, Curve, Beefy. And many more are integrating. Polygons biggest DEX is Quickswap.Another great choice Fantom (FTM), while being it’s own blockchain is compatible with EVM and can be regarded as a helper chain. For simplicity, we will focus on Polygon. In order to move to or from Polygon, you need to use this Bridge (there are loads of other bridges too, e.g. between BSC or Fantom). I personally connect with Metamask (signing all transactions with my hardware wallet Ledger/Trezorfor security!) to interact with Bridges and dApps. You can easily add different networks (handy link to do it automatic) supporting the Ethereum Virtual Machine (EVM) and seamlessly swap between them in your Metamask, after you’ve added them. FYI using the bridge: You first need to pay a 1 time fee (typically low) for each new coin to give it permission to the smart contract to bridge your selected token (e.g. Eth, AAVE, LINK). First after this, you get prompted to do the actual Transfer (higher). Again, wait until gas fees are low, but when it’s done you are… FREE! If you use bridge when we’re at 15-25 gwei, I recon moving e.g. Eth costs like $3-5 for permission, then $7-10 for Transfer. With current gas prices it’s surely >$100! Once your crypto arrives at Polygon, you automatically get some free MATIC that lasts many transactions (Cant remember, its 0,01?). You can also use a faucet if you run out of gas https://matic.supply/. I typically just buy 1 MATIC for all my accounts, that holds for more than I ever need.
4) The amazing tech of Ethereum’s Layer 2 Rollups.
Ethereum 2.0 with it’s sharding and with the current working and coming L2/Rollups will easily scale to >100,000 TPS. Heck even 1 of the current Rollups alone has far better TPS than many of the current L1-competitors! There are 3 types of rollups. ZK-rollups (Zero Knowledge rollups), Optimistic rollups and Hybrids. ZK-rollups bundle or “roll up” hundreds of transfers off-chain and generates a cryptographic proof, known as a SNARK (succinct non-interactive argument of knowledge). This is known as a validity proof and is posted on layer 1. Examples of Rollups being built are: Loopring, Starkware, Matter Labs zkSync, Aztec 2.0, Hermez network (merged with Polygon), zkTube Optimistic rollups sit in parallel to the main Ethereum chain on layer 2. They can offer improvements in scalability because they don’t do any computation by default. Instead, after a transaction they propose the new state to Mainnet, or “notarise” the transaction. With Optimistic rollups, transactions are written to the main Ethereum chain as calldata, optimising them further by reducing the gas cost. Examples are: Optimism (Live!), Arbitrum (Live!), Fuel Network, Cartesi and OMGX. In some years Ethereum will be a beast, a platform hosting the web3 as a base later, having multiple shards and rollups, sidechains and helper-chains working on top of it making it able to host the necessary thousands or millions of TPS needed for mass adoption.
EDIT – If you liked this, feel free to check out 2 of my other recent educational posts: