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Understanding gas fees in five minutes

Why does the same transaction cost pennies one hour and a small fortune the next? It comes down to an auction.

Sofia Lindqvist
· Stablecoin & Payments Correspondent

Published · Updated

4 min read

Understanding gas fees in five minutes
Understanding gas fees in five minutes

Every action on a blockchain — sending a token, swapping, minting — consumes computational work. Gas is the unit that measures that work, and the fee is what you pay validators to include your transaction in a block.

It's an auction

Block space is finite. When demand spikes, users bid higher fees to jump the queue. When the network is quiet, fees fall toward the floor. That is why costs swing so widely across a single day.

How to pay less

  • Transact during off-peak hours when the auction is cold.
  • Use a layer-2 network, where the same action costs a fraction of the base layer.
  • Batch multiple actions into one transaction where the app allows it.

The mental model that helps: you are not paying for the transaction itself, you are paying for priority in a crowded room.

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