How to pay Less Gas Fee
Updated: Jul 14
DeFi or decentralized applications running on the blockchain are another booming industry that is growing rapidly, with a diverse range of financial products that are competitive with traditional banking. Moreover, it is a system that operates automatically without a central authority, making it very interesting recently.
However, using dApps on the Ethereum blockchain network at this time may have drawbacks, particularly in terms of gas fees (transaction fees), which can be prohibitively expensive for individual users. This is due to several factors such as network congestion, transaction complexity/size, and increased demand from users.
Nevertheless, there are still ways to reduce gas fees significantly when making transactions. Today, we will take a look at some of the possible ways how to save on gas fees together!
1. Organize transaction types efficiently and find tools to help
All types of transactions on Ethereum require gas fees, and each type of transaction uses a different amount of gas. For example, sending regular funds from one account to another will require less gas than calling a complex smart contract. Therefore, before making a transaction, it is important to check what you are doing.
Example situation: Let's say a user wants to swap coins on a DEX. The user can choose to use dApps that search for the best price on all DEXs (Dex Aggregators) such as 1inch or Paraswap. These apps will collect the prices of different DEXs on the chain and automatically provide the most cost-effective swap route.
Example situation: if you have multiple Ethereum addresses that hold different tokens. Instead of sending tokens from one address to another separately, you can use a tool like DeFi Saver that allows you to create a recipe of Ethereum activities and run them virtually. The simulation will estimate the gas fee in ETH and let you customize your recipe to minimize gas fees.
This simple method can help save gas fees, as these dApps can reduce unnecessary steps/transactions.
2. Check the network for congestion and plan ahead when possible
The Ethereum network is never quiet, with transactions waiting to be verified at all times. The more transactions there are, the higher the gas fees become. Therefore, it is necessary to check the network congestion before making transactions.
The easiest way to check is to simply check the gas fees on websites like Etherscan or Eth Gas Station, which display real-time gas fees and average transaction times. Alternatively, You can also use a tool like Gas Now that predicts the gas prices in the next few minutes based on pending transactions.
If users are not in a rush, they can wait for a less congested period to make transactions, such as weekends and non-urgent hours (such as late at night), or choose to pay lower gas fees than the network requires and wait for the transaction to eventually go through. However, this method may take longer than usual and there is a risk that the transaction will not be verified.
3. Calculate Ethereum gas fees according to the conditions
Ethereum gas fees are not fixed and fluctuate based on the supply and demand of the network. Therefore, it is important to always calculate the gas fees before sending a transaction to avoid overpaying or underpaying.
The most common way to calculate Ethereum gas fees is to use tools like MetaMask or MyEtherWallet, which provide suggested gas prices based on the current network conditions. These tools also allow you to manually adjust the gas price if you are experienced or need a more urgent transaction.
Another way to calculate Ethereum gas fees is to use tools like Gas Tracker or Gas Fee Calculator, which automatically estimate the optimal gas price for your transaction based on historical data and current trends. These tools also allow you to specify the amount of money and predict the transaction confirmation time in advance.
4. Explore Ethereum Layer 2 platforms and technologies
Another effective way to reduce gas fees is to switch to Ethereum Layer 2 (Layer 2 is a project that builds on top of the main Ethereum chain) that processes transactions off-chain, making it lower gas fees and increased speed than before. It also supports a larger number of users. However, the security of Layer 2 transactions may not be as strong as real transactions on the main blockchain. But it is a good option for those on a budget.
There are various types of Layer 2 projects and underlying technologies, such as Sidechains, Rollups, Zero-knowledge, State channels, Plasma, and many more, each with its strengths and weaknesses. However, almost every technology aims to develop and provide a better user experience and enhance the capabilities of various dApps to work seamlessly.
Examples of Layer 2 projects with DeFi ecosystems and various dApps include Polygon, Optimism, Arbitrum, zkSync, Loopring, xDai, and StarkWare.
5. Gas fees on Ethereum blockchain and a new way to reduce expenses (Nativ)
Last but not least, you can just simply use a crypto savings wallet that gives you interest on your savings (stable crypto yield), such as Nativ wallet in this case.
Suppose that currently, the main Ethereum blockchain has a gas price of 35 Gwei, which translates to approximately $1.6 per transaction (as of 24/4/23). If you want to save on gas fees or pay them for free, just follow these steps:
Separate some of your stablecoins (USDT, USDC, etc) from your main wallet of any supported blockchain and transfer them to your crypto savings wallet, in this article, we'll use Nativ wallet as an example.
Stake your USDT and USDC coins on the Nativ Earn function to earn 8% APY, more than banks offer.
Claim your rewards daily to use them to pay for gas fees on the blockchain without spending a single penny!
For instance, Consider a scenario where you need a gas fee to claim weekly rewards on DeFi.
To make enough yield for the gas fee each week:
*Daily Interest Rate = APY(8%) / 365 = 0.0002192
1.6/(7 days*0.0002192) = 1042.75 principal needed
Now you know how much to save to never have to spend extra money on gas fee or at least reduce the fee on the mainnet. Hope this trick help, and if you love it, don’t forget to share it to your friend!
DeFi and various dApps on the blockchain are considered new opportunities that the traditional financial world has never given us before, especially in terms of various decentralized financial products. However, the DeFi world, especially on the Ethereum blockchain, still faces challenges in terms of high gas fees, which requires users to find various strategies to minimize gas fees as much as possible.
However, if you use a Nativ wallet, the problem of gas fees will disappear. You can simply lock a portion of your assets to earn APY and use the interest earned to pay for gas fees. Try to calculate it yourself!
Therefore, Nativ wallet is an interesting option for those who want to earn a small return to pay for gas fees for the various dApps they use, with the Earn function that offers surprisingly high interest rates of up to 8% when locking USDT and USDC coins.