Gas fees

Gas fees are the payments users make to a blockchain network to have a transaction, such as a transfer, swap, or smart contract call, processed and included in a block. The name comes from Ethereum, where "gas" measures the computational work a transaction requires, and the fee is that gas usage multiplied by a price per unit of gas that fluctuates with network demand.

Fees rise when many users compete for limited block space at the same time, since transactions offering a higher fee are typically prioritized, and fall during quiet periods. This differs from a fixed fee charged by a centralized payment provider, since gas fees are market-driven and can spike unpredictably during high network activity, such as a popular token launch. A transaction can also fail after fees are partially spent if it runs out of allotted gas before completing.

Gas fees matter for anyone using a decentralized exchange or other on-chain application, since they add a real cost to every interaction and can make small transactions uneconomical on congested networks — part of why some blockchains and "layer 2" scaling solutions were built to lower them. Gas price trends are tracked through on-chain analytics as a proxy for congestion. A common pitfall is underestimating gas costs on small trades, or setting a gas limit too low, which can cause a transaction to fail while the fee is still consumed.