NFT gas fees, or transaction fees, are the bane of any NFT collector on Ethereum. While some blockchains offer the benefits of little to no gas fees, ETH gas prices can get up to thousands of dollars –just for buying a single NFT. Obviously, for new investors, the high transaction costs (a.k.a. crypto gas fees ) are a serious damper.
Some buyers, for instance, have lost more than $2000 in gas fees while trying to buy the latest hyped mint. But how does this happen? And why are buyers willing to gamble their crypto away on failed transactions? Well some marketplaces, like Opensea, have measures in place to lower NFT fas fees. Some NFT collectors have found innovative ways to ensure the cheapest gas fees possible.
While there’s quite a lot to it, let’s begin with : what are gas fees exactly? Moreover, what determines their price?
Does minting an NFT cost money?
In short, yes. To explain, every single action on the Ethereum network requires validation. That means every time you buy, sell or mint NFTs, you must pay a gas fee.
Wait, what are NFT gas fees?
Every transaction on the Ethereum blockchain is processed and validated by miners, who use powerful systems and a lot of energy. In short, you pay the miner an amount of Eth for the computational effort required to carry out a transaction. This fee is referred to as the “gas fee”. Essentially, NFT gas fees serve as an incentive to miners and help reduce the spam on the network.
How do you calculate Ethereum gas fees?
With the Ethereum network, you must determine a “gas limit” which is the maximum gas you are willing to pay per transaction. Meanwhile, the “gas price” is the amount you are willing to pay for each unit of gas. Put simply, gas limit x gas price = gas fee. . The gas limit determines how soon your transaction is processed. Set it too low and miners will prioritize transactions that offer high gas fees over yours.
The Best Ethereum Gas Fee Calculators
With the constant fluctuation, it may sound difficult to stay ahead. Luckily, you can also use various free analysis tools to understand the state of the blockchain at various times. These tools will show you the current price of a transaction in real time. Etherscan has a handy gas tracker you can is is what we call NFT Gas Wars. To learn about what check out here. Another such example is Ethereum Price.
Why do NFT Gas fees get so expensive?
The gas price depends on a couple of things.
Firstly, the number and type of computations required to verify transactions—the more complex the computations, the higher the gas fee.
Next, the biggest deciding factor is network activity. When you’re excited to mint a new NFT, the chances are you’re not the only one. Hyped mints are often competitive and, unfortunately, the gas price will reflect that. NFT gas prices can reach the thousands just to mint a single NFT. Meanwhile, the less fortunate minters get stuck with failed transactions, lost gas fees and no NFT to show for it. To find out more about what to do in that situation, check out our guide on NFT Gas Wars.
How do I avoid high NFT gas fees?
While you can’t entirely avoid gas fees on the majority of blockchains, the good news is that there are many ways to reduce the amount paid. Let’s take a look at some of them.
1. Ethereum Layer 2 and Sidechains have cheaper fees
Layer 2 solutions and Ethereum sidechain platforms exist simply to overcome the limitations of Ethereum. Essentially, these are separate blockchains built on the Ethereum network that are faster, cheaper or both.
One such important protocol is Polygon, which has been steadily attracting many projects, especially among blockchain game developers. Fully compatible with Ethereum, Polygon offers fast and low-cost transactions.
As the industry eagerly awaits the development of Ethereum 2.0, it can be a good idea to switch to other frameworks like Polygon, or even LOOM, and SKALE for now. Along with low crypto gas fees, these also come with the security of the Ethereum network.
2. Alternative blockchains offer low or no NFT gas fees
The Ethereum blockchain has the highest network activity, and therefore the highest fees. That’s also due to its status as a proof of work blockchain–at least until the Merge.
Tezos and Binance Smart Chain are reliable and support smart contracts–the technology necessary to create NFTs. As Tezos uses the Proof-of-Stake model, it not only offers gasless transactions but also a low carbon footprint. Meanwhile, the WAX blockchain has established itself as the leading decentralized network for entertainment and video games.
3. Combining transactions can save gas too
Another simple way to save gas is by combining related transactions. This is because the amount of gas varies depending on the type of transaction.
Let’s look at an example. Say you hold multiple tokens at different addresses – address A and address B – and want to send all the tokens to address C. If you transfer the tokens from each address separately, you will have to pay the gas price twice. However, if you were to transfer tokens from A to B, and then make only one transaction from B to C, you will only have to pay half the gas price.
4. What are gas tokens?
Gas tokens let you tokenize gas. Simply put, you can mint gas tokens when gas prices are low and then use/redeem them when the prices are high. When you redeem a gas token, you will be refunded in ETH, which you can use to pay for your gas expenses.
A good example of this service is GasToken.io. GasToken works in a simple way: first, when gas prices are low, you mint a token by saving data in GasToken contract’s storage. Then, when the prices go up, you use up these tokens by sending them to the GasToken contract. Here, they will be destroyed, and you will get a refund for the fresh transaction.
However, it should be noted that gas tokens are not the most ideal solution for reducing gas fees. In fact, they clog Ethereum’s state size and currently, there are plans to stop the refund system entirely.
What time are NFT gas fees lowest?
Since gas prices fluctuate primarily due to network activity, keeping a tab on the traffic is a great way to save yourself money in gas.
Ethereum gas prices are typically lowest on Saturdays and Sundays. Then, they hit their highest on Tuesdays and Thursdays – when the network is the busiest. Then, NFT gas fees are also cheaper when Americans are sleeping. Believe it or not, Americans make up the majority of people using the network!
If your transaction is not urgent, it’s best to wait for one of these moments.
To learn more about the quietest times, make sure to read our guide on when to buy NFTs.
Can I mint an NFT for free?
While most NFTs cost money to mint, there are some ways to mint NFTs for free. Some chains or projects offer unique ways of minting NFTs when you’re on a budget.
You can mint a POAP for free
Poap, or Proof of Attendance Protocol, allows you to mint NFTs on the xDAI chain for free! These simple NFTs serve as digital memories of web3 events in the real world and the metaverse. POAP badges are a firm favorite of the NFT community, with many NFT conferences and projects incorporating them into their events. Minting a POAP is completely free and available via their website.
What is lazy minting?
Lazy Minting is a feature used by several NFT marketplaces, but was originally made famous by Opensea. In short, it allows you to upload your NFTs to the marketplace without paying the gas required to mint them. Then, the marketplace will only mint the NFT as soon as someone decides to purchase it. Essentially, this saves the waste of energy and money minting NFTs no one wants.
Is opensea gas free?
No, unfortunately, opensea gas is not free. To buy an NFT, it costs gas. To sell an NFT, it costs gas. It even costs gas fees to list an NFT for sale for the first time. Buying and selling NFTs can be an expensive business.
Opensea one time gas fee: what is it?
If you are listing NFTs, you must only pay a gas fee once per collection. This can ve very handy for those launching their first collection. Then, using the aforementioned lazy minting feature, newbies can avoid wasting money on lost minting fees with no guarantee of a sale.
The way forward for NFT gas fees
As more and more people embrace NFTs, high gas fees could become a major setback for blockchains like Ethereum. Buyers and sellers, will, of course, want a platform with low gas and high scalability. This has also given rise to new projects and new ways for users to reduce gas fees.
With the Merge scheduled for September 2022, high gas prices could soon be a thing of the past in 2023. Until then, make sure you explore all the ways to reduce the fees before you make your next transaction.
All investment/financial opinions expressed by NFTevening.com are not recommendations.
This article is educational material.
As always, make your own research prior to making any kind of investment.
