As the Ethereum blockchain was launched, newer, innovative features of blockchains emerged. Among the many applications, the one that caught almost everyone’s attention was Non-Fungible Tokens – NFTs. NFTs created a new stream of artists known as digital artists, and so many of them made great money in no time! This further led to the growth of blockchain-enabled NFT marketplaces where any NFT enthusiast could buy, sell, or trade these assets. Nevertheless, there’s some hesitation among people about venturing into this, primarily because of the costs associated with NFTs. These costs are otherwise known as the NFT gas fees. In this article, we delve into what the NFT gas fee is, what impacts gas fee, how it is calculated, who’s entitled to the gas fee, ways to minimize it, and more. Let’s get started.
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What is the NFT Gas Fee?
In the Ethereum blockchain or the Ethereum Virtual Machine (EVM), ”gas” refers to anything required to complete the transaction or execute a smart contract. At its most basic, NFTs, which mostly reside on the Ethereum blockchain, need to compensate their node operators or network validators who help complete the transactions or execute the smart contracts. This is achieved using the concept of a gas fee. In essence, “gas” refers to the effort or resources expended in completing the blockchain transactions required to create the NFT. The gas fee is measured in the small denomination of cryptocurrency Ether (ETH) known as gwei, which is 10ٰ⁻⁹ ETH.
What Affects Gas Fees And How Are They Calculated?
The rule of thumb is when more users compete for the same space in the blockchain, the gas fee increases. When more people use various apps running on the chain at the same time, a lot of data is stored or changed, numerous NFTs are minted, and digital assets are purchased or sold. And so, the fee is incurred. To understand how gas fees are calculated, one needs to look at two parameters — gas limit and gas price. In easy terms, the ‘gas limit’ is the maximum work that a validator is expected to do on a transaction. On the other hand, ‘gas price refers’ to the price per unit of work completed.
Gas fee / Transaction cost = Gas Limit x Gas Price
Sometimes, transactions charge an added cost to the gas fee to ensure it is completed much faster. That said, blockchains have different gas fees depending on how they validate their transactions.
Who Receives the Gas Fee?
Quite often, users or NFT traders are curious to know to whom the NFT gas fee is awarded. Well, this depends on how the transactions are verified and validated by the blockchain. There are primarily two methods – Proof-of-Work (PoW) and Proof-of-Stake (PoS).
In the case of Proof-of-Stake, the validators stake their cryptocurrency coins or Ether (ETH) on the platform, and based on the amount staked, they get the chance to verify and authenticate the transactions. On the flip side, in Proof-of-Work, the operators are known as miners. Miners are powerful computers that solve complex cryptographic equations, and depending on who completes them faster and more accurately, they receive the opportunity to verify and validate blockchain transactions.
In any case, the operators—validators or miners—spend a lot of energy and time completing the transaction. As a reward, they are offered a gas fee. This is a viable option for securing transactions on the blockchain network.
Crypto Gas Fee Calculator Ethereum
For the most Blockchain are the gas fees reasonable for ethereum they could be high compared to the transaction you make. For this we have made a live crypto gas fee calculator to display the live gas fee in ETH or USD. You can also calculate the Metamask gas fees if you are on the ETH blockchain.
These estimates are not guaranteed and will vary based on network congestion. Updated every 60 seconds.
How to Avoid a Higher NFT Gas Fee?
While different NFT marketplaces use different gas fees depending on the blockchains underpinning them, some rules are common to keep your gas fees low. It’s best to use the marketplace when traffic is low. This could mean early morning hours or daytime when everyone is at work. At these times, the NFT gas fee will be much less. Another suggestion is to use NFT marketplaces that reside on blockchains like Polygon and Optimism, which require less gas.
How to Monitor Gas Fees?
If you wish to monitor the gas fee, you can use the tools below.
Etherscan
This acts as a transaction gas price estimator.
Blocknative ETH Gas Estimator
This tool estimates gas prices and comes with a Chrome extension. In addition, it supports two categories of transactions – Type 0 Legacy and Type 2 EIP-1559.
Cryptoneur Gas Fee Calculator
This handy tool lets you calculate gas fees in your local currency across different transaction types, such as those on Mainnet, Arbitrum, etc.
Wrapping Up
NFTs are a key innovation in the world of blockchains. As the frenzy of these digital marvels keeps rising, NFT marketplaces are also increasing the associated costs. Understand the concepts in the article on trading smarter by paying lesser NFT gas fees.
