Sometimes, the tiniest matters can cause the greatest confusion! And, in the huge world of NFTs, thereās one very tiny matter causing large confusion: NFT gas fees.
For people who call themselves NFT connoisseurs might not think that these fees are worth explaining. However, for people starting out and wanting to start a business, understanding these fees is crucial. If you understand what NFT gas fees are and how they work, you can save a lot of money! If you truly nail the understanding of these fees, youāll NEVER miss! Also, fees are one of the top ten red flags you should always look out for when investing in an NFT project.
Therefore, weāre here to help you end all confusion once and for all. Weāre here to break down the NFT gas fees and how to utilize this knowledge. How to calculate gas fees and use that to buy/sell NFTs! And, make sure to join our FREE hub and benefit from all our free guides. Just click on the button below to join!
WHAT ARE NFT GAS FEES?
NFT gas fees are charges that users have to pay to make up for the energy that the network uses. In other words, youāre paying fees for the energy that a transaction process uses on the Ethereum blockchain. Aka the same thing as processing fees on a credit card when youāre doing any transaction!
So, just think of it as putting actual gas in your car that fuels specific actions that you execute. These actions include minting, buying, and selling NFTs – all of which are actions/transactions on the blockchain! To make it more clear, every transaction on the blockchain uses a series of computational steps.
Blockchain miners perform these necessary steps. And, each step needs fees to complete the transaction. And, finally, end-users are the ones who pay for these fees called NFT gas fees.
UNIT OF GAS FEES
Also, gas fees are additional fees that are represented using the Gwei unit. This is a very fraction of Ether: 1 Gwei is equal to 0.000000001 ETH
WHERE DO YOU PAY NFT GAS FEES?
- Account Registration fees
- Token or NFT contract approval
- Selling NFTs
- Buying NFTs
- Canceling a bid or listing
HOW ARE NFT GAS FEES CALCULATED?
Gas Limit (aka Gas Units)
First, you have to set a gas limit: the maximum amount of gas you are willing to spend per transaction. A standard ETH transfer requires a gas limit of 21,000 units of gas!
Gas Price (Base Fee + Tip)
Next, thereās the gas price: the amount you are willing to spend per unit of gas.
If gas fees are equal to the gas limit – your transaction will go through
If gas fees are greater than the gas limit – your transaction does not go through and is reverted
And, if gas fees are lower than the gas limit – your transaction goes through and the excess is refunded
You can use this tool here to keep track of all the NFT gas fees to check the value before a transaction!
HOW TO AVOID PAYING HIGH GAS FEES?
So, NFT gas fees can actually fluctuate a lot depending on the ātrafficā or the demand. When the demand for the Ethereum blockchain is high, the gas fees increase. This is all about popularity and hype that put a lot of pressure on the blockchain.Ā
On the other hand, you can also expect to pay higher gas fees if you want your transaction speed to be higher! However, there are things that you can do to avoid paying high NFT gas fees which include: