Gas fee is the term used for the fee that NFT marketplaces charge for any transaction in the trading system. NFT marketplaces charge this fee because each transaction incurs a cost to buy, create and sell an NFT.
Even though not all marketplaces charge a gas fee, some well-known NFT marketplaces such as OpenSea and Rarible currently do.
Most NFTs sell at moderate prices of a few hundred dollars, while many others will never sell at all. There is really no way of knowing what amount you are required to spend during the particular transactions since gas fees keep on changing all the time depending on the demand and supply of the NFTs.
Gas fees are paid in Gwei, a short term for GigWei, which equals 0.000000001 of an Ethereum coin.
This is the cost of doing a transaction or carrying out a contract on their blockchain network. Gwei units are used to represent gas pricing in Ethereum. It is defined by the quantity of network traffic and the computational power required to complete a transaction.
Each time an NFT is transferred between wallets, the two parties might be required to pay a gas fee, though not always the case. The buyer pays a gas fee to purchase their NFT, and the sellerpays a gas fee to make the sale, but in other circumstances, the seller can transfer the transaction fee to the buyer.
NFTs are unique tokens that give their holders undisputable ownership rights to specific properties. NFTs can be attached to a work of art, a piece of clothing, or even an avatar/character in a video game.
NFTs have spread everywhere in decentralized space, acting as a bridge between the digital and real worlds. To get your hands on an NFT, you always have to pay the asking price plus gas fees, the transactional fees, in the case of the cryptocurrency world, that users pay for minting their “smart contracts” into the blockchain.
Why Do NFTs Require Gas?
Gas guarantees that users of the Ethereum network do not spam it. It is an effective method of maintaining security. It imposes restrictions to prevent individuals from abusing computational power. Gas fees are paid to miners, incentivizing them to include your transactions in the blockchain.
Why are Ethereum gas fees so expensive?
As we mentioned before, the higher the demand and popularity, the higher the gas fee. Ethereum is one of the most popular blockchain networks that people use for NFT minting and crypto transactions.
The value of the fee changes according to the demand rate of that specific cryptocurrency in the market. It also depends on how fast you are willing to mint your NFTs, i.e. the speed of the minting process. The faster you want, the higher you have to pay to the NFT marketplaces and crypto networks.
How gas fees are calculated?
Below are the elements to keep in mind when calculating a gas fee
- The Ethereum price at the time of transaction.
- The amount of gas needed to make the transaction.
- The congestion of the network itself.
- The London Hard Fork.
The London hard fork was recently implemented. Ethereum has now changed how the gas fees are calculated.
Each block has a base fee to be paid to get your transaction on the blockchain. London Hard Fork will switch the Ethereum blockchain community to Proof-of-Stake (PoS) from the Proof-of-Work blockchain.
According to the PoS concept, the mining power of stakeholders depends on the number of coins they hold. More the coins, more the power, and vice versa.
Tips to gas fees when minting NFT artwork
Here are some of the easiest ways to save gas fees while minting an NFT artwork.
Use Layer-2 Sidechains and Blockchain Networks
The most popular layer-2 sidechains and networks include Polygon Technology, Arbitrum, and Optimism. Layer-2 refers to a network or the technology that operates on top of an underlying blockchain protocol to improve its scalability and efficiency.
This category of scaling solutions entails shifting a portion of a blockchain protocol’s transactional burden to an adjacent system architecture, which then handles the brunt of the network’s processing and only subsequently reports back to the main blockchain to finalize its results.
By abstracting the majority of data processing to auxiliary architecture, the base layer blockchain becomes less congested, resulting in ultimately more scalable.
Check the Prices Before NFT Minting
Before making a transaction to buy or sell NFTs, make sure that you check the ETH chart or the Polygon chart, the two popular sites with charts that can help the buyer or the seller determine the cost of the NFTs by checking the projections for that past week or month.
Use tools like the ETH gas station, Etherscan.io, and Crypto.com, to calculate how much it would cost in fiat currency or to check the most recent price of Ethereum gas fees. This allows NFT submissions to the days or times when there are low levels of network congestion.
The higher number of people wanting their transactions to be processed, the faster the blockchain network has to work. Busy times equals high gas fees.
This is exactly why Ethereum gas fees are at an all-time high, as everyone nowadays wants their NFTs to be minted through the Ethereum blockchain. So, the advisable time is to wait out the NFT minting process.
Find an NFT Tool that uses Lazy Minting
This is a process through which an NFT marketplace defers the gas fees to the buyers instead of the creators. The minting process is pushed forward until someone actually purchases a token.
The immediate minting cost is removed from the creators of the NFTs and transferred to the point of purchase.
Use Different Blockchain Networks
Other chains work on consensus mechanisms that do not rely on proof-of-work, the main reason for the high gas fees on Ethereum.
Examples of chain networks include:
- Flow Blockchain
- Binance Smart Chain
- Tezos
Adjust Your Settings
The applications and tools available have their default settings and can sometimes not be suitable for our requirements. This means we have to change the settings parameters to suit our gas fees budgets.
Apps factor in the user’s device specifications to determine the standard settings. They set gas fees to a flat model most of the time.
Under the advanced tab of wallet settings, the gas fees should be able to have customizable options per transaction. As a result, users will see a separate window showing gas fees for each transaction.
The option of waiting out isn’t always viable, as it is better to mint as fast as you can when the prices become high. Just pay the gas fees for faster minting, and still save a little by adjusting your software settings.
Before creating your item or NFT, you need to
- Open up your Metamask wallet.
- Go to Account and then Settings.
- Click on the Advanced tab and enable Advanced gas controls.
- Next, Customized transaction nonce to ON.
- Then, click on Create Item. During the file upload interval, a Metamask tab should appear again. Once it appears, you need to: Click on the Edit button above your Gas Fees section.
- Choose from the Slow, Average, and Fast options according to your preference. The slower process will require the least amount of gas fees.
You can also enter your gas fees amount manually, but do remember that setting it too low can result in the transaction failing, as miners rarely pick up low gas transactions.
Conclusion
The proof-of-work on Ethereum is being phased out slowly, as the user activity and developers on other chains are at an all-time high. Transactions are not required in this case to preserve computing energy. This will need some more thought and persuading of the stakeholder, but it is certainly a possibility.
On the other hand, the growth of layer-2 scaling solutions like Polygon and Arbitrum shows why a mass adoption of NFTs is coming in the near future.
With a huge contract that needs to be completed quickly, the gas price will be higher. Ethereum NFT users have been disappointed by the huge gas fee they have to pay on the Ethereum network to buy NFTs.
This has become the biggest challenge that Ethereum NFT enthusiasts have experienced during the recent NFT sales. Sometimes, the gas fees have even exceeded the actual price of the NFT by a big margin.