Gas Fee

A gas fee is the payment required to perform a transaction or execute a smart contract on a blockchain. It compensates validators or miners for the computing resources your action consumes and helps prevent the network from being spammed.

How it works

Every operation has a cost measured in units of “gas.” Your total fee is the amount of gas used multiplied by the price you are willing to pay per unit. When the network is busy, users bid higher prices to have their transactions included sooner, so fees rise with demand and fall when activity is light.

Why it matters

Gas fees determine how affordable a network is to use, and high fees during congestion are a major reason Layer 2 scaling solutions exist. Understanding gas also helps you avoid overpaying or having a transaction stall because the fee was set too low.

Example

On Ethereum, gas is denominated in gwei, a tiny fraction of one ether, and wallets estimate the fee before you confirm.