Gas is the fee you pay a blockchain to process your transaction. The "why is it so high?" question usually comes from not seeing what's underneath — so let's break the number into its parts.
What you're actually paying for
Every transaction asks the network to do work: run a smart contract, update balances, store the result across thousands of machines. Gas compensates the validators for that work. A simple transfer is cheap; a multi-step DeFi interaction does more work and costs more.
The three numbers (on Ethereum)
- Gas limit — the maximum units of work your transaction may use. A swap needs more than a plain send.
- Base fee — a per-unit price the network sets that rises when blocks are full and falls when they're empty. It's measured in gwei (a tiny fraction of ETH) and is burned.
- Priority fee (tip) — an extra per-unit amount you add to be included faster when it's busy.
Roughly: fee ≈ gas used × (base fee + priority fee). The same swap can cost wildly different amounts purely because the base fee moved with demand.
Why it spikes
Block space is limited. When many people transact at once — a hot mint, a market crash, an airdrop — they bid up the priority fee to get in first, and the base fee climbs as blocks fill. Gas is essentially a live auction for space, so the price tracks demand minute to minute.
How to read an estimate
Your wallet estimates the fee before you sign. Two habits help:
- If the estimate looks high, wait — congestion passes, often within hours.
- Match the speed to the need; there's no point paying a large tip for a trade that isn't time-sensitive.
And remember: on Ethereum a failed transaction still consumes gas, because the network did the work of attempting it. We'll see why failures happen in Lesson 21.
- Transacting during a congestion spike when the same action would cost a fraction an hour later.
- Setting the gas limit manually too low to 'save money', which makes the transaction fail and still cost gas.
- Forgetting that the trading fee and the gas fee are two different things.