A fee paid to process transactions on blockchains like Ethereum. Higher gas means faster processing during congested periods.
Gas is the unit of computational effort required to execute transactions and smart contract operations on blockchains like Ethereum. Users pay gas fees (denominated in the chain's native token) to compensate validators for processing and verifying their transactions. Gas prices fluctuate based on network demand — during high-activity periods (NFT drops, meme coin launches, market volatility), gas fees can spike dramatically. Ethereum's gas fees historically ranged from under $1 to over $100 per transaction, which drove the development of Layer 2 solutions (Arbitrum, Optimism, Base) offering the same security at 1/10th to 1/100th the cost. Since EIP-1559, Ethereum splits gas into a base fee (burned) and a priority tip. Other chains like Solana and BNB Chain have designed for near-zero gas fees from the start.
Gas is the unit measuring computational effort required to execute operations on a blockchain — and by extension, the transaction fee users pay for this computation. On Ethereum, gas costs fluctuate based on network congestion: simple ETH transfers cost ~21,000 gas, while complex DeFi interactions can consume hundreds of thousands of gas units, multiplied by the current gas price (measured in gwei). During peak demand, Ethereum gas fees have exceeded $100+ per transaction, pricing out smaller users. This fee dynamic drove the development of Layer 2 scaling solutions (Arbitrum, Optimism, Base) that process transactions off-chain at a fraction of mainnet cost. Different blockchains handle fees differently: Solana's fees are fractions of a cent, BNB Chain charges pennies, and some chains (IOTA, Nano) have no transaction fees at all. EIP-1559 on Ethereum introduced a base fee (burned) plus a priority tip (paid to validators), making gas prices more predictable.
During the Bored Ape Yacht Club's Otherside NFT mint in April 2022, Ethereum gas fees spiked to over $450 per transaction, with users spending $170+ million in gas fees in a single evening.
Use Layer 2 networks (Arbitrum, Optimism, Base) for most DeFi activity — fees are typically 90-99% lower than Ethereum mainnet. Time your transactions for off-peak hours (weekends, early morning US time). Use gas tracking tools to monitor current prices. For Ethereum mainnet, batch transactions when possible and set reasonable gas limits.