Gas Fees in Crypto: What They Are and How to Save?

We have seen countless investors get caught off guard by gas fees—especially newcomers who expect crypto to be “free.” There’s nothing free. 

In truth, fees can drain your balance or stall important transfers. Many learn this the hard way during NFT mints, token swaps, or network congestion. 

Gas fees reveal how blockchains operate under pressure. Knowing how they work helps you avoid costly surprises. This guide breaks it down—what gas fees are, how they’re calculated, which blockchains charge the most, and how to reduce them using the right tools and timing. 

If you want to stay sharp, start here. 

So, What Are Gas Fees in Crypto?

Gas fees are the costs paid to process transactions on a blockchain. Each action—like sending coins or using a smart contract—requires energy from the network. That energy is measured and charged as a gas fee.

Ethereum uses a system where gas fees depend on how busy the network is. Simple transfers cost less. Complex actions, like token swaps or NFT mints, cost more. The price can rise quickly when many users compete for space in a block.

Gas fees keep the network secure. They reward validators and stop spam. They also act as a filter, letting urgent or higher-value transactions go through first.

Every investor should track gas prices. Moving assets at the wrong time can waste money. Tools like Etherscan’s Gas Tracker help pick the right moment. Understanding this helps avoid high costs and plan better transactions.

How Do Blockchain Networks Calculate Gas Fees?

Blockchain networks calculate gas fees using three main factors: computational cost, network demand, and base fee models.

Each transaction requires computing power. The network assigns a gas unit cost based on the complexity of the action. A simple transfer might use 21,000 gas units. A smart contract call could demand 10 times more.

The total gas fee also depends on how congested the network is. When demand rises, users offer higher fees to get priority. This bidding increases the overall cost.

For example, Ethereum uses a dynamic model. It includes a base fee (burned) and a priority tip (given to validators). Other chains like Bitcoin let users set their own fees. Solana and Polygon use fixed or ultra-low-cost models.

See, each chain applies its own formula, but the core idea stays the same—more complexity and more congestion mean higher fees.

Which Cryptocurrencies Charge the Most and Least for Transactions?

Gas and transaction fees vary widely across blockchain ecosystems, depending on architecture, consensus design, and network load. Among all, Ethereum (ETH) continues to lead in average and peak transaction costs. According to CoinLaw (2025), the average Ethereum transaction fee stands at $2.45, with historical spikes exceeding $150 during congestion-heavy events such as NFT mints or major DeFi launches.

Bitcoin (BTC) follows, with an average fee of $1.20, largely due to its 1MB block size and bidding-based fee system. In rare cases, errors or spikes have led to massive fees—like the $3.1 million mistake paid by Paxos in 2023.

On the lower end, Solana (SOL) charges a negligible $0.00025 per transaction under normal conditions. Even during peak traffic, it rarely exceeds $1, thanks to its high-throughput architecture. Polygon (MATIC) and Arbitrum (ARB) also offer low-cost alternatives, averaging around $0.01 and $0.15, respectively.

Here’s a comparative snapshot (based on 2025 data):

Ethereum Gas Fees Drop to $0.05: What Caused This 5-Year Low?

According to Etherscan data, Ethereum gas fees have hit a historical low of $0.05 per transaction, which marks the lowest fee level in five years. It’s a significant decline from peak gas prices that once exceeded $100 per transaction during major DeFi booms and NFT launches.

This drop wasn’t random. In fact, several structural changes triggered this shift.

The most direct cause was Ethereum’s increased gas limit to 36 million units per block. By raising this limit, Ethereum now allows more transactions per block. As a result, network congestion decreased, reducing the competitive pressure to bid higher fees.

Moreover, daily transaction volume has become more balanced post-Ethereum’s transition to Proof-of-Stake (PoS). Since the Merge and subsequent upgrades like EIP-4844, the network has seen more efficient block production and faster transaction finality.

Historical context makes this drop even more striking. Back in 2020, Ethereum gas fees reached a peak of 709.7 gwei, which translated to almost $196 per transaction. That spike was caused by intense network usage, particularly in DeFi protocols and NFT minting events.

Now, as activity shifts toward Layer 2 solutions like Arbitrum and Optimism, and with more efficient gas compression techniques, Ethereum’s main net traffic has become lighter. The result is a cleaner, faster, and cheaper network.

This 5-year low signals a major milestone—not just for user affordability, but for Ethereum’s long-term scalability roadmap.

Historical Gas Fee Spikes: From $196 Peaks to Costly Mistakes

Ethereum and Bitcoin have both seen extreme gas fee spikes that highlight the volatility of blockchain network costs. At its worst, Ethereum gas fees surged to 709.7 gwei—about $196 per transaction—during 2020’s DeFi summer and NFT craze. Each spike reflected intense network congestion, where users bid aggressively to push their transactions through limited block space.

Bitcoin, while less complex computationally, experienced its own infamous moment. In September 2023, Paxos mistakenly paid a $3.1 million transaction fee—the largest ever recorded on the network. This happened due to a configuration bug that miscalculated the input and output balance. The Bitcoin miner F2Pool eventually returned the excess fee, but the incident underscored how small technical errors can lead to major financial losses.

BNB Chain has also seen temporary spikes, reaching over $100 during flash arbitrage events. Polygon, known for low fees, has jumped to $2.50+ during high-traffic NFT launches.

You must note that these historical cases reveal two patterns: fee spikes often follow user demand surges (like DeFi launches or meme coin trading frenzies), and they can be worsened by poor fee estimation tools or smart contract inefficiencies. Platforms like MetaMask sometimes over-allocate gas, adding to the problem.

Can Layer 2 Solutions Like Arbitrum and Optimism Fix High Fees?

Yes, Layer 2 solutions like Arbitrum and Optimism offer a practical response to high fees. As someone who’s spent years tracking fee structures and scalability attempts, I can say Layer 2s aren’t hype — they’re essential upgrades.

Ethereum’s Layer 1 can’t process high volumes without congestion. When demand surges, gas fees skyrocket. That’s where Layer 2s come in. These networks batch and compress multiple transactions off-chain, then post them back to Ethereum in a single record. As a result, users pay a fraction of the normal gas cost.

For example, according to Etherscan data, average Ethereum gas fees dropped to $0.05 in early 2025. A major reason was the increase in Ethereum’s gas limit and wider adoption of Layer 2s. Arbitrum and Optimism now process millions of transactions daily. Their impact is visible not just in cost savings, but in throughput as well.

Arbitrum’s average fees sit around $0.15. Optimism often charges less than $0.10. Compare that to Ethereum’s historical peaks of $100+ and you understand their importance.

Consequently, developers are moving many dApps to Layer 2 by default. DeFi tools, NFT markets, and even games now favor Arbitrum or Optimism due to lower costs and faster confirmation.

Still, no solution is perfect. Layer 2 networks come with trade-offs like reliance on bridge security and delayed withdrawal times. But in practical terms, they remain the best solution so far for reducing Ethereum’s fee burden.

Why Do Gas Fees Spike During DeFi and NFT Activity?

Gas fees spike during DeFi and NFT activity because blockchain networks like Ethereum operate with limited capacity. Each block has a maximum gas limit, and only so many transactions can fit. When demand rises, users compete to get their transactions processed faster — this creates a bidding war.

During DeFi launches or NFT mints, traffic increases sharply. For instance, minting a new NFT collection may trigger thousands of simultaneous transactions, all requiring smart contract execution. These transactions use significantly more gas than simple transfers. In fact, interacting with a DeFi protocol can consume 10x–50x more gas than sending ETH.

Now, since block space stays constant, the only way to prioritize transactions is to increase the fee. That’s when spikes happen. Users set higher gas prices to outbid others, especially when fear of missing out (FOMO) kicks in. Tools like MetaMask even suggest aggressive fee settings during volatile moments, amplifying the pressure.

According to past Etherscan records, gas prices during major NFT drops or DeFi token launches have gone beyond 100 gwei, with final transaction fees exceeding $80–$150. In extreme cases like Yuga Labs’ Otherside mint in 2022, total fees spent topped tens of millions in one night.

So, high-value opportunities combined with limited network throughput lead directly to these price surges. Until scalability improves or more users shift to Layer 2, DeFi and NFT hype cycles will continue to push gas fees higher.

How to Reduce Crypto Transaction Fees?

• Use tools like Etherscan Gas Tracker to find low-fee times.
• Choose Layer 2s (Arbitrum, Optimism, Polygon) for cheaper transactions.
• Manually adjust gas fees in MetaMask or Rabby wallet.
• Use low-fee chains like Solana, Avalanche, or BNB Chain.
• Batch multiple transfers when possible.
• Avoid transacting during NFT drops or DeFi launches.
  

Are Fee-Free Models Like Aptos and Sui the Future of Crypto?

Aptos and Sui are new blockchain platforms. They claim to offer fee-free or gasless experiences. But the truth is more complex.

Aptos lets apps sponsor user fees. Sui does the same with a model called “sponsored transactions.” This means someone still pays — just not the end user. 

Both platforms use advanced tech. Aptos runs on a parallel execution engine. Sui optimizes blockspace with Move programming. This helps cut costs and keep the system fast.

These models feel free to users. That’s why they’re gaining attention. In 2025, many wallets and apps started exploring similar paths. MetaMask now tests smart fee estimators. zkSync, Starknet, and others try bundling fees too.

Still, there are risks as well. Someone has to cover the cost. Without strong funding or revenue, the model breaks. It’s not truly free — just abstracted.

Experts say fee subsidies may work for now. But long-term, hybrid models will win. Low-cost chains like Solana or Avalanche already prove this. They charge tiny fees without hiding costs.

In short, Aptos and Sui show a shift. They aim to improve user experience. But full “fee-free” crypto isn’t here yet — and may never be.

Final Outlook

Gas fees in Crypto will continue to matter, but not in the same way. Ethereum’s upgrades, like Dencun, have already reduced Layer 2 costs significantly. Tools like Arbitrum, Optimism, and zkSync now handle most network load. As adoption grows, more users will shift to these cheaper alternatives instead of paying full Layer 1 fees.

That said, gas fees still reflect demand and network value. High spikes during DeFi launches or NFT mints prove users still care about fast confirmations. 

So, in 2025 and beyond, gas will act more like a pricing signal — not a barrier. Users won’t avoid crypto due to cost, but they’ll stay alert to timing and network choice.