Gas Fee refers to the need for blockchain users to verify with the network when performing transactions or interacting with smart contracts. Fees paid by users are generally paid in the form of native assets of the blockchain network.

Gas Fee was originally designed to compensate network validators for the energy consumption required to verify transactions, and to provide a layer of security for the blockchain network itself - reducing the cost of users maliciously sending spam transactions. high.

The term Gas was originally coined by Ethereum. According to the Ethereum developer page, "Gas is the fuel that makes Ethereum run, just like a car needs gasoline to run."

Some other blockchain networks follow the usage of Gas Fee (such as Polygon, BNB Chain, etc.), and some may call these transaction fees, miner fees, or other similar fees (such as Bitcoin, Litecoin, etc.). But essentially they are fees paid by users to network validators in order to execute transactions.

Gas Fee calculation method

Different networks have different Gas Fee calculation methods. Let’s take Ethereum as an example: Total Fee = Gas limit * ( Base fee + Priority fee)

• Gas Limit refers to the user’s willingness to trade in a certain transaction The maximum Gas Unit spent in . Gas Unit is a unit that measures the computing workload required to perform specific operations on the Ethereum network. The Gas Unit required for a certain transaction is determined by the size of the computing workload involved in the transaction, so different executions The Gas Unit required for transactions is different. For example, a standard $ETH transfer transaction requires 21,000 Units of Gas, while transactions involving smart contracts are generally more complex and require higher Gas Units.
• Base Fee refers to the minimum Gas Fee required for a transaction to be executed in Ethereum. This value is dynamically adjusted based on the number of users interacting with the network at any given time
strong>, the more interactive users, the higher the Base Fee. Real-time Base Fee can be viewed in Etherscan Gas Tracker.
• Priority Fee refers to the additional fee added voluntarily by the user in order to make a transaction execute faster. Validators on the Ethereum network can see which transactions have a Priority Fee attached. When a validator verifies a transaction that has a Priority Fee attached, they receive this fee. Therefore, this mechanism encourages validators to prioritize transactions with higher Priority Fees in order to earn more profits. On the other hand, users who want to complete transactions faster than other users will need to attach more Priority Fees to the transaction.

Note: The above calculation method is the current calculation method after the London upgrade of the Ethereum network in August 2021. To understand the calculation method before the London upgrade, please refer to EIP-1559 .

Gas refund mechanism

Suppose we set the Gas Limit to 50,000 and execute an $ETH transfer transaction. The network validator will consume 21,000 Units of Gas, and the remaining 29,000 will be returned.

Assuming we set the Gas Limit to 20,000, the network validator will still consume 20,000 Units of Gas in an attempt to complete the transaction, but due to insufficient Gas Units, the transaction will not be confirmed. But since the validator has completed work worth 20,000 Gas Units, these 20,000 Gas Units will be consumed and will not be returned.

Gwei

When transacting and paying Gas Fee in Ethereum, we can often see the word Gwei as the unit of Gas Fee, then Gwei is what.

When designing Ethereum, $ETH was designed to be split into a minimum of 1,000,000,000,000,000,000 shares (18 zeros). To facilitate calculation, the minimum split unit was set to the unit of measurement wei. Later, since Gas Fee is usually much less than 1 $ETH, Gwei (gigawei) was set as the unit of measurement used to express Gas Fee. giga means gigabyte (as in gigabyte-GB, gigabyte), 1 $ETH = 1,000,000,000 Gwei (9 zeros)