Gas fees are the transaction costs paid to blockchain validators (or miners) for processing and including your transaction in a block. The term “gas” originated on Ethereum, where computational operations are measured in gas units — each operation (sending ETH, calling a smart contract, minting an NFT) costs a defined amount of gas, and you pay a fee in ETH per unit of gas used. Gas fees are not fixed: they fluctuate dynamically based on network demand, rising during high activity (NFT drops, DeFi peaks) and falling during quiet periods.
How Ethereum gas works post-EIP-1559 (August 2021): each block has a base fee (automatically adjusted by the network based on congestion and burned, not paid to validators) and an optional priority tip (paid to validators to incentivise faster inclusion). Users can set a max fee (the maximum they’re willing to pay) and a priority fee. During the 2021 NFT and DeFi peak, Ethereum gas fees regularly hit $50–200 per transaction, pricing out retail users and driving adoption of cheaper L2s (Arbitrum, Optimism, Base) and alt-L1s (Solana, Avalanche). On Solana and most L2s, fees are fractions of a cent. Gas fees are a critical consideration for any on-chain trading strategy — high fees on Ethereum L1 make small trades economically unviable.
Example: During the 2021 NFT boom, minting a single NFT on Ethereum cost $200–500 in gas. The same mint on Polygon cost $0.001 — illustrating why Layer 2 adoption accelerated rapidly during high-fee periods.
Learn more: Ethereum.org — Gas and Fees
