Crypto glossary
Gas fee
Gas is the unit that measures the computing work needed to run a transaction on Ethereum and similar blockchains, paid in the network's native token.
Every operation on Ethereum, from a simple ETH transfer to a complex DeFi trade, consumes a set amount of gas. A basic transfer uses 21,000 gas units, while interacting with smart contracts takes more. The fee equals the gas used multiplied by the gas price, usually quoted in gwei (1 gwei = 0.000000001 ETH).
Since the London upgrade of August 2021 (EIP-1559), each block has a base fee that is burned and rises or falls with demand, plus an optional priority fee, or tip, that goes to the validator. When the network is congested, gas prices spike and small transactions can become uneconomic.
Gas protects the network from spam and endless loops, because every computation costs money. Layer 2 networks such as Arbitrum, Optimism and Base bundle transactions together to cut gas costs for users.
Example
If a token swap uses 150,000 gas and the gas price is 20 gwei, the fee is 3,000,000 gwei, or 0.003 ETH.
Related terms
Latest articles on Gas fee
- Ethereum Gas Fees: What They Are, Why They Matter, and How to Reduce Them
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