What is Gas Fee?

Gas fee is the fee paid to the nodes(miner) for executing smart contracts. When you transfer money on the Ethereum blockchain, the miner must pack your transaction and put it on the blockchain to complete the transaction. In this process, the nodes will consume computing resources, and they should be compensated. The gas fee depends on the complexity of the transaction. The more complicated the smart contract transaction is, the higher the Gas Fee.

The gas fee is the fee paid to the nodes (Miner)

Calculation of gas fees

Gas fees have different names on different trading platforms, such as Gas Fees, Transaction Fees, etc., but they all refer to transaction fees (ETH) and are calculated as the unit price of Gas (Gas Price) x the amount of Gas consumed (Gas Used). For example:

In the transaction, 0.01 ETH needs to be transferred from account A to account B. The unit price of Gas at that time was 10 Gwei. This transaction required a total of 21,000 units of Gas, and a total of 0.00021 ETH was required to be paid as a Gas fee.

In Ethereum, the smallest unit of ETH is Wei, and when it comes to Gas, the unit is Gwei. The following formula can express the relationship between them: 1 ETH = 10 ^ 9 Gwei = 10 ^ 18 Wei

The unit price of Gas determines your transaction speed

In Ethereum, the price of Gas can be set by users, but the set price will affect the transaction speed. Because miners give priority to transactions with high unit prices. If the transaction party sets the unit price too low, the speed of the transaction will slow down (the miner processes the transaction with the high unit price first), and the transaction may also be cancelled over time (the unit price is too low and there is no reason for the miner to deal with it).


Miners have worked hard for calculation and verification, and gas fees can be used as rewards to incentivize nodes with high computing power.

Whether it is Bitcoin or Ethereum, or other public chains, nodes are required to act as verifiers for transactions. The entire verification process consumes a large number of computing resources (electricity) and storage resources. Miner fees are paid to nodes as a form of reward for this consumption. For Ethereum, gas fees are the main source of revenue for future mining.

Reduce network load

There is always a large amount of network redundancy in the blockchain network. The update of the state of a node needs to be synchronized to the entire network after verification, and the size of the blockchain itself is limited, which the blockchain network will encourage consumers to write efficient and concise smart contracts. The higher the efficiency of contract execution, the lower the gas fee. The high gas fee can also prevent users from performing complex technical tasks which could overload the network and paralyze it.

Prevent malicious attacks: The existence of Gas fees can prevent high-frequency network attacks (DDOS) to a certain extent. The Gas fee makes each attack of the attacker consume a certain amount of resources.

Miner fees can contribute to the growth of the value for the public chain tokens. The miner fee model creates demand as users need to purchase and hold public chain tokens. The transaction requires the conversion of tokens to gas fees for payments, which will encourage users to hold these tokens for a long time – users can maintain expectations for the long-term growth of tokens.


Gas fees increase the barriers of entry for parties to the transaction

For developers, the use of bandwidth, computing power and storage resources on the Internet requires continuous consumption of tokens. Because the tokens are destroyed after consumption, the developer’s cost is relatively high.


At this stage, users can understand Gas Fees as the cost of executing smart contracts. The more complex the smart contract is, the more Gas Fee it will cost.

Join MEXC and Start Trading Today!