What are blockchain gas fees?
What are gas fees?
In web3, the term “gas fee” refers to the payment needed to execute transactions on the blockchain. These payments compensate the node operators who keep the blockchain functioning. This validation helps ensure the blockchain has a permanent, immutable record.
We’ll walk you through the purpose of gas fees, what impacts them, how to avoid paying high fees, how fees differ by blockchain, and how OpenSea makes it easy to keep costs to a minimum. Let’s dive in.
What is the purpose of gas fees?
Ethereum calls gas “the fuel that allows [the network] to operate, in the same way that a car needs gasoline to run.”
Gas fees compensate the entities, called node operators or network validators, who validate transactions on the blockchain. Each blockchain supported by OpenSea (Ethereum, Solana, Polygon, and Klaytn) has different gas fees. These fees differ depending on how each chain validates transactions.
Users often want to know who receives the money from these gas fees, and the answer to that depends on the method each blockchain uses to verify transactions. So let’s step back for a moment to discuss the two primary methods of validation: Proof-of-Stake and Proof-of-Work.
Proof-of-Stake and Proof-of-Work
Blockchains that use the Proof-of-Stake method verify transactions using validators. Validators are users who stake large amounts of that blockchain’s cryptocurrency. These validators check each transaction and monitor all activity on the blockchain to ensure it’s correct. This method has validators vote on the outcome.
Blockchains that use the Proof-of-Work method verify transactions using miners. Miners are tasked with solving complex math equations that verify each transaction. Both of these methods are complex, time-consuming, and ultimately ensure the security of the blockchain, which is why the gas fees are awarded to the operators.
What is The Merge and how does it impact gas fees?
Ethereum has historically used the Proof-of-Work method but recently changed to the Proof-of-Stake method in an event known as “The Merge.” According to the Ethereum Foundation, this will reduce its energy consumption by ~99.95%. The Foundation has stated that “the Merge was a change of consensus mechanism, not an expansion of network capacity, and was never intended to lower gas fees.”
What impacts gas fees and how are they calculated?
Gas fees increase when more people use applications that run on top of a blockchain’s network. Gas fees increase as these users compete for space within the block. Think of it like Uber’s surge pricing model that increases the cost of booking a ride during the busiest commuting times.
Fees are incurred when data is stored or changed, tokens are transferred, NFTs are minted, sold, or purchased, and so on. Each of these actions involves different changes to the blockchain and therefore requires a different gas fee.
It’s also important to note that gas fees don’t change the price of the NFT you’re buying, but they do change the overall price of the transaction, so buying an NFT during a busy time when other people are also using the network can result in an overall higher cost.
How can you avoid high gas fees?
OpenSea doesn’t control gas fees, set gas fees, or receive any of the gas fees incurred by users on the platform. Instead, they all go to network validators or miners.
To help avoid high gas fees, try making your transactions during times when there are fewer people using the network (for example, in the middle of the day when everyone is at work, or early in the morning). When you start the NFT purchase process using OpenSea, you’ll see the gas fee broken down by your wallet provider, so you can watch the fee refresh and complete the transaction when it’s low. You can find historical and current gas prices for Ethereum on EthereumPrice.Org/Gas which will help you find the lowest activity times.
You can also keep costs down by using chains that require less gas like Polygon and Solana (more on that later!).
Types of fees
There are two types of fees users pay when using OpenSea: one-time fees and recurring fees. There are a few one-time fees users will need to pay when performing certain actions for the first time. These transactions grant certain permissions. The recurring fees are incurred when users accept an offer, transfer an NFT, buy an NFT, cancel an auction, cancel a bid, convert ETH to WETH (or vice versa), freeze metadata, or bridge ETH or withdraw ETH to and from Polygon.
What is lazy minting and how does it affect gas fees?
Minting NFTs usually costs money. OpenSea is proud to offer lazy minting, the first way to create and sell NFTs on the Ethereum or Polygon blockchains without paying gas fees. Lazy minting decouples the on-chain aspects of creating an NFT from the metadata associated with the creation of the NFT.
The majority of actions on OpenSea don’t require any gas fees. Things like browsing, favoriting, creating a new NFT by lazy minting, creating a collection, initializing your account, listing an additional NFT in a collection at a fixed price or in an auction, and reducing the price of a listed NFT don’t require any gas. Actions that require gas are typically those that are actually written onto the blockchain.
How do gas fees differ by chain?
OpenSea is currently compatible with the Ethereum, Polygon, Klaytn, Arbitrum, Optimism, Avalanche, BNB Chain, and Solana blockchains, and each of these blockchains has different gas fees associated with transactions on their networks.
We’ve already discussed Ethereum gas fees and how they’re calculated, so now let’s take a look at the other chains.
Solana gas fees
Solana is a blockchain that, like Ethereum, provides a platform for NFTs and decentralized apps, but it differs in its method of validation. Solana uses a method called Proof-of-History, which is similar to Proof-of-Stake in that it doesn’t require much energy to create additional blocks in the chain. This gives Solana lower gas fees than many other chains.
EVM-compatible chain gas fees
Polygon, Arbitrum, and Optimism are EVM-compatible chains, which means they are technically compatible with Ethereum, and tokens can be transferred between them and Ethereum. EVM-compatible chains run more efficiently and often have lower transaction fees.
Klaytn gas fees
Klaytn is a blockchain that’s compatible with Ethereum and is specifically designed for utilizing the metaverse. Klaytn offers users a suite of tools specifically for use in the metaverse which makes it a one-stop-shop for those interested in that aspect of web3. It’s super fast and has low gas fees. This is useful for things like in-game NFT drops.
Why use OpenSea for your NFT transactions?
As explained in the section above, OpenSea is compatible with multiple chains with low gas fees. We know each chain has their own advantages, and they’re all constantly evolving, so OpenSea is here to offer you an array of options to choose from when minting, buying, or selling NFTs.
The new protocol used by OpenSea, called Seaport, also significantly lowers gas fees for NFT transactions. Since we’ve rolled out Seaport, we’ve helped users save an estimated 35% in gas fees for transactions.
If you’re checking out and discover you don’t have enough cryptocurrency to complete your purchase, we give you the option to top off your wallet with a credit or debit card. This makes the buying process faster and easier.
Lastly, we allow users to create NFTs for free through Lazy Minting. As the largest and most diverse NFT marketplace, OpenSea is here to provide you with the best selection of NFTs on a variety of blockchains.
No, OpenSea is not able to refund gas fees, since we’re not the entity that receives or keeps the gas fees. Any gas consumed during an attempt to complete a transaction that lacks enough cryptocurrency is spent on that transaction and cannot be refunded.
It depends. If a seller on OpenSea lists an NFT at a fixed price, the buyer pays the gas fees associated with that transaction. If a seller accepts an offer from a prospective buyer to purchase the NFT, the seller pays the gas fees associated with that transaction. The seller does not pay the gas fees for auctions, unless they manually accept an offer during that auction. When lazy minting, the creator does not have to pay gas fees to create their NFTs.
Node operators are entities who operate nodes in exchange for fees from transactions on the networks in which they operate. These providers allow for the computing power that acts as the foundation of a blockchain and allows for transactions of all kinds to take place on it.