Short answer: your Ethereum fee is gas used × (base fee + priority fee). Gas used depends on what the transaction does, the base fee is set by the network according to congestion and is burned, and the priority fee is your tip to validators. Layer-2 networks cut the whole equation by one to two orders of magnitude.
The three numbers
- Gas used — a measure of computational work. A plain ETH transfer always uses 21,000 gas. A token transfer uses more. A DeFi swap, more again, because it touches several contracts.
- Base fee — set automatically by the protocol, rising when blocks are full and falling when they empty. It is burned, meaning it is removed from ETH supply rather than paid to anyone.
- Priority fee — the tip that gives validators a reason to include your transaction sooner.
Both fees are quoted in gwei, which is one billionth of an ETH. When someone says "gas is 12 gwei", they mean the base fee per unit of gas.
Why costs differ so much between actions
| Action | Approximate gas used | Relative cost |
|---|---|---|
| Send ETH | 21,000 | Baseline |
| Send an ERC-20 token | ~45,000–65,000 | 2–3× |
| Approve a token | ~45,000 | 2× |
| Swap on a DEX | ~130,000–250,000 | 6–12× |
| Complex DeFi interaction | 300,000+ | 15×+ |
This is why a "cheap" swap during a busy hour can cost more than a large transfer during a quiet one — you are paying for computation, multiplied by whatever the network's congestion price happens to be.
What EIP-1559 changed
Before 2021, users blindly bid a single gas price and frequently overpaid. EIP-1559 introduced the algorithmic base fee, which adjusts block by block toward a target of half-full blocks, plus a separate tip. The result is far more predictable pricing and a refund of anything you over-set. It did not make Ethereum cheap — it made it legible.
Six practical ways to pay less
- Use a Layer-2. Arbitrum, Optimism, Base and zkSync settle to Ethereum but cost cents. This is the single biggest saving available.
- Send at quiet times. Weekends and early UTC hours are consistently cheaper.
- Set approvals to the amount you need rather than unlimited, and do not repeat an approval you already have.
- Batch actions where an interface offers it — one transaction beats three.
- Avoid failed transactions. A reverted transaction still burns the gas it consumed. Simulate first when your wallet offers it.
- Do not use Ethereum mainnet for plain transfers. If the recipient can accept USDT on Tron or Solana, use that instead — see choosing a USDT network.
Why your transaction is stuck
A pending transaction almost always means the total fee you offered is below the current base fee, or the tip is too small to be attractive. Most wallets let you speed it up by resubmitting with the same nonce and a higher fee, or cancel it by sending a zero-value transaction to yourself with that nonce and a higher fee. Nothing is lost while it waits.
Key takeaways
- Fee = gas used × (base fee + priority fee).
- The base fee is burned; the priority fee goes to validators.
- Complexity, not value, drives the cost.
- Moving to a Layer-2 saves more than every timing trick combined.
If you need ETH on a Layer-2 to get started, you can receive it directly on the network you choose through the exchange calculator.
Frequently asked questions
What is gwei?
A denomination of ether equal to 0.000000001 ETH. Gas prices are quoted in gwei because the numbers would otherwise be unreadably small.
Do I get a refund if I set the gas limit too high?
Yes. You are charged only for the gas actually consumed. Setting the limit too low is the dangerous direction — the transaction fails and the consumed gas is still spent.
Why are Layer-2 fees so much lower?
They execute transactions off the main chain and post compressed data back to Ethereum, so thousands of users share the cost of a single mainnet posting instead of each paying for their own block space.
