Every action on Ethereum costs a fee. That fee is called gas, and it is paid in ETH. In April 2026, a simple ETH transfer on the main network cost about $0.01, according to Dwellir.
In 2020, average gas prices reached 480 gwei during a rush of trading activity. The gap between those two points is large, and the reasons are worth understanding.
This article uses data from seven sources to explain how gas fees are built, why they rise, and what has pushed them down. It ends with practical steps to pay less.
What Gas Is and Why Ethereum Needs It
Gas is the unit that measures how much computing work a transaction needs. Sending ETH is light work. Swapping tokens, minting an NFT, or running a smart contract is heavier work.
Ethereum.org describes gas as the fuel of the network, in the same way a car needs gasoline. Each step of computation must be paid for. This protects the network from spam and from code that runs in endless loops.
Britannica compares gas fees to a highway toll. The difference is that many decentralized operators run the Ethereum road, not one person. Ledger adds that gas turns limited block space into a market, where space goes to those willing to pay.
Gas fees also pay validators. Validators are the operators who process transactions and add blocks to the chain. Since September 2022, Ethereum has used proof of stake, and validators must lock up at least 32 ETH as a bond, according to Ledger.
Ledger says this staked ETH, not the fees, is the main source of network security. Priority fees still add to what validators earn. Ethereum.org adds that the fee is paid whether a transaction succeeds or fails.
Gas prices are quoted in gwei. One gwei is one billionth of an ETH. The table shows how the units relate.
| Unit | Equals |
|---|---|
| 1 ETH | 1,000,000,000 gwei |
| 1 gwei | 0.000000001 ETH, or 1,000,000,000 wei |
| 1 ETH | 1,000,000,000,000,000,000 wei |
Each operation on the Ethereum Virtual Machine has a fixed gas cost. An ADD instruction costs 3 gas. Reading storage for the first time in a transaction costs 2,100 gas, and writing a new value to storage costs 20,000 gas or more, according to Dwellir.
Because of this, total gas depends on what the transaction does. A simple ETH transfer always uses 21,000 gas. A Uniswap token swap uses 150,000 to 300,000 gas, and complex DeFi actions can pass 500,000.
| Action | Typical gas used |
|---|---|
| Simple ETH transfer | 21,000 |
| Uniswap token swap | 150,000 to 300,000 |
| Complex DeFi operation | 500,000 or more |
How Gas Fees Are Calculated
Before August 2021, Ethereum used a first-price auction. Users named a price, and miners picked the highest bids. Dwellir says users had no reliable way to guess the right price, so they often overpaid or waited.
The London upgrade in August 2021 added EIP-1559. It split the gas price into two parts, shown in the formula below.
The base fee is set by the protocol, not by users. It is burned, which means it is removed from circulation and not paid to anyone. Since EIP-1559 launched, more than 4.52 million ETH has been burned this way, per Dwellir.
The priority fee is a tip that goes to the validator. A higher tip makes a transaction more attractive. Ethereum.org says a transaction that pays only the base fee is valid but unlikely to be picked.
Users can also set a max fee, which is the most they will pay per unit of gas. They only pay the base fee plus the tip. Any unused part of the max fee is refunded.
Ethereum.org gives an example. Jordan sends 1 ETH to Taylor. The transfer uses 21,000 gas, the base fee is 10 gwei, and Jordan adds a 2 gwei tip.
The fee is 21,000 × (10 + 2), or 252,000 gwei. That equals 0.000252 ETH. Jordan is charged 1.000252 ETH, Taylor receives 1 ETH, the validator gets a 0.000042 ETH tip, and 0.00021 ETH is burned.
| Part of fee | Gwei | ETH | Goes to |
|---|---|---|---|
| Base fee | 210,000 | 0.00021 | Burned |
| Tip | 42,000 | 0.000042 | Validator |
| Total | 252,000 | 0.000252 | Network |
Blockscout shows a similar case with a 20 gwei base fee and a 2 gwei tip. The fee is 462,000 gwei, or 0.000462 ETH. Of that, 420,000 gwei is burned.
Most wallets set both numbers for the user. Ledger’s wallet app, for example, offers slow, medium and fast options based on current network conditions.
Gas Limits, Refunds and Failed Transactions
The gas limit is the most gas a user is willing to spend on a transaction. It works as a safety cap. A standard ETH transfer needs a limit of 21,000 units.
Ethereum.org gives two examples. With a limit of 50,000 on a simple transfer, the transaction uses 21,000 and the other 29,000 is returned. With a limit of 20,000, the transaction fails at validation, is rejected before it enters a block, and uses no gas.
A different result happens when a transaction runs out of gas partway through. The EVM reverts any changes, but all the gas provided is still used for the work done. Ledger confirms that failed transactions still cost gas and cannot be refunded.
| Scenario | Gas limit | Gas used | Result |
|---|---|---|---|
| Limit above need | 50,000 | 21,000 | 29,000 returned |
| Limit equals need | 21,000 | 21,000 | Transaction succeeds |
| Limit too low at validation | 20,000 | 0 | Rejected, no charge |
| Runs out during execution | Too low for the code | All gas provided | Changes reverted, gas still used |
Ledger lists common reasons for failure. These include a gas limit that is too low, a smart contract that reverts, a failed balance check, and a swap that goes past its slippage tolerance.
Blockscout points out a common mix-up. Raising the gas limit does not make a transaction faster. The limit is a ceiling, and the priority fee is what affects speed.
Developers often add a buffer to gas estimates. Dwellir suggests 20% to 25% for standard transactions and 30% or more for complex multi-call operations. Unused gas is refunded, so the buffer costs nothing if the transaction succeeds.
Why Gas Fees Rise: The Base Fee Rule
Block space is limited, so fees rise when more people want in. Each block has a target size equal to half of the gas limit. A block can grow to twice the target when demand is high, according to Ethereum.org.
The base fee reacts to the size of the last block. It rises by up to 12.5% when a block is full, stays flat at the target, and falls by up to 12.5% when a block is empty. Ethereum.org says gas prices update about every 12 seconds.
The table shows Ethereum.org’s example. It uses a 36 million gas limit and a starting base fee of 100 gwei.
| Block | Gas included | Fee increase | Base fee (gwei) |
|---|---|---|---|
| 1 | 18M | 0% | 100 |
| 2 | 36M | 0% | 100 |
| 3 | 36M | 12.5% | 112.5 |
| 4 | 36M | 12.5% | 126.6 |
| 5 | 36M | 12.5% | 142.4 |
| 6 | 36M | 12.5% | 160.2 |
| 7 | 36M | 12.5% | 180.2 |
| 8 | 36M | 12.5% | 202.7 |
The same source shows how fast this adds up. If blocks stayed full, the base fee would reach 2,705.6 gwei by block 30 and 28,531.3 gwei by block 50. By block 100 it would pass 10 million gwei.
That growth is why long spikes are rare. Prices climb to a level where users stop paying. Ethereum.org says extended runs of full blocks are unlikely.
Blockscout describes this as an auction for block space that settles every few seconds. The work in a transfer stays the same, but the competition changes the price. That is why the same transfer can cost cents in the morning and several dollars in the afternoon.
Demand spikes tend to follow known events. Ledger lists popular NFT mints, sharp market swings and liquidations, token launches and airdrop claims, and bursts of DeFi activity. In those moments, users also raise their tips to compete.
One early case was CryptoKitties. The game launched in November 2017 and caused heavy congestion and very high fees, Ethereum.org says. It pushed developers to look for ways to scale the network.
Timing also matters. Dwellir reports that prices tend to be lowest from 02:00 to 05:00 UTC on weekends. They are usually highest from Tuesday to Thursday between 14:00 and 18:00 UTC, when US and European users overlap.
Complex apps add to the cost too. Ethereum.org notes that smart contract apps that run many operations use more gas, and a poorly written contract used by many people can add to congestion.
Fee History: From 480 Gwei to Pennies
Before 2020, Ethereum gas fees were usually a few cents but often spiked, according to Investopedia. After January 2020, fees rose and frequently went above $20 as more users joined.
DeFi Summer in 2020 pushed average gas prices to 480 gwei, Dwellir reports. The NFT boom in May 2021 pushed the average transaction fee to $53.
EIP-1559 arrived in August 2021 and made fees easier to predict. It did not lower them by itself. The Merge in September 2022 moved Ethereum to proof of stake, and fees afterward ranged from a few dollars up to $30, Investopedia says.
Investopedia adds that The Merge was not designed to fix high fees. It was one of several updates that together are expected to lower costs over time.
Ethereum.org says scaling upgrades are meant to address high fees over time. Layer 2 scaling is named as the main plan to lower gas costs and let the network handle thousands of transactions per second.
By April 2026, the picture had changed. Dwellir says base fees were around 0.05 gwei, and average base fees sat below 0.1 gwei. Fees were down by more than 90% year over year on some measures.
| Period | Event | Reported fee level |
|---|---|---|
| Before 2020 | Early years | A few cents, with spikes |
| After Jan 2020 | More users join | Often above $20 |
| 2020 | DeFi Summer | Average of 480 gwei |
| May 2021 | NFT boom | Average fee of $53 |
| Aug 2021 | EIP-1559 (London) | New base fee and tip model |
| Sep 2022 | The Merge | A few dollars to $30 |
| Mar 2024 | Dencun (EIP-4844) | Lower Layer 2 data costs |
| Apr 2026 | Low congestion | Base fee near 0.05 gwei; transfer about $0.01 |
The chart below uses four reported figures from the sources. They come from different measures and dates, so it shows reference points and not one data series.
Why Fees Are Low in 2026
Two changes explain most of the drop. Ethereum’s gas limit grew from 30 million in 2021 to 60 million now, according to Dwellir. That doubled the space in each block.
At the same time, many users moved to Layer 2 networks. Dwellir says mainnet blocks are now about 25% to 35% full. The target is 50%.
When blocks fall below the target, the base fee drops by up to 12.5% each block. After many such blocks, the fee reaches very low levels. That is how the base fee fell to about 0.05 gwei.
At that level, a simple ETH transfer costs about $0.01, and a token swap costs $0.25 to $0.39. These figures change with the price of ETH and the size of the tip.
The price of ETH also plays a part. Fees are paid in ETH, so the same amount of gas costs more in dollars when ETH is worth more. The dollar figures in this section depend on the ETH price at the time Dwellir measured them.
For comparison, Dwellir’s worked example uses a 12 gwei base fee and a 2 gwei tip. At $2,500 per ETH, a 21,000 gas transfer costs about $0.74 in that case.
| Measure | Earlier | Now (April 2026) |
|---|---|---|
| Gas limit | 30 million (2021) | 60 million |
| Block fullness | Target of 50% | About 25% to 35% |
| Base fee | 480 gwei average in 2020 | Below 0.1 gwei average |
| Simple transfer | $0.74 at a 12 gwei base fee (example) | About $0.01 |
Ethereum.org says fees rise when demand goes past block space. That means today’s low levels depend on demand staying light on the main chain. Dwellir also notes that the fee formula still applies, so apps still need accurate estimates.
Layer 2 Networks Compared With Ethereum Mainnet
Layer 2 networks run transactions off the main chain. They then post compressed data back to Ethereum. Ledger names Arbitrum, Optimism, Base and zkSync as examples.
Fees on a Layer 2 have two parts, according to Dwellir. One is the cost of running the transaction on the Layer 2, which is low. The other is the cost of posting data to Ethereum, which is the larger share.
The Dencun upgrade in March 2024 added blob transactions through EIP-4844. Blobs use a separate fee market and are pruned after about 18 days. Dwellir says this cut Layer 2 data costs by 10 to 100 times.
The table shows typical ranges under low congestion in April 2026.
| Network | Simple transfer | Token swap | Data model |
|---|---|---|---|
| Ethereum Mainnet | $0.01 to $0.10 | $0.25 to $0.39 | Full execution and storage |
| Arbitrum | $0.005 to $0.008 | $0.01 to $0.05 | L2 execution and L1 blob data |
| Base | $0.001 to $0.01 | $0.003 to $0.03 | L2 execution and L1 blob data |
| Optimism | $0.01 to $0.03 | $0.02 to $0.05 | L2 execution and L1 blob data |
Layer 2 networks now handle most of Ethereum’s transaction volume, often more than 90%, per Dwellir. The same source says moving an app to a Layer 2 cuts fees by more than 90% for most uses. Security still comes from Ethereum.
Blockscout adds that fees on Layer 2 networks work the same way at the unit level. They are simply smaller because the data is compressed. Actual costs vary with network load, ETH price and the blob fee market.
How to Reduce Your Gas Fees
Users cannot avoid gas fees on Ethereum, but they can lower them. Ledger, Ethereum.org and Investopedia suggest several habits.
- Time your transactions. Ledger says fees are often lower late at night and on weekends in major time zones. Ethereum.org says Ethereum is generally cheaper when North America is asleep.
- Wait a few minutes. Gas prices update about every 12 seconds. Ethereum.org says waiting a short time when fees are high can lower the cost.
- Check a gas tracker. Etherscan shows live base and priority fees in gwei, plus the day’s high, low and average, per Investopedia. Britannica also names ETH Gas Station.
- Use a Layer 2. For swaps, stablecoin transfers and DeFi, Ledger calls a Layer 2 the most cost-effective choice for most everyday actions.
- Pick a slower speed. If a transfer is not urgent, a slower setting and a smaller tip can save money over time, says Ledger.
- Batch actions. Combining actions into fewer transactions means fewer signatures and less total gas, according to Ledger.
- Set a sensible gas limit. A limit that is too low can cause a failed transaction, and the gas used is not refunded.
Developers can cut costs for their users as well. Dwellir lists several code changes that reduce gas use. Storage packing is the largest, because the EVM reads and writes in 32-byte slots.
| Method | Before | After | Gas saved |
|---|---|---|---|
| Storage packing | 3 slots, 3 writes | 1 slot, 1 write | About 40,000 per write |
| Events instead of storage | 20,000+ gas | About 375 base | About 19,000+ per write |
| Batch transactions | 21,000 each | 21,000 shared once | 21,000 per batched transaction |
| Constant or immutable | 2,100 per cold read | 3 | 2,097 per read |
Batching ten transfers into one call saves 189,000 gas in base costs alone, Dwellir says. For data that is only read off-chain, emitting an event costs far less than writing to storage.
Britannica makes the point that small fees add up. Frequent trading or heavy DeFi use can build a large total over time. Unlike the mostly predictable fees at stock brokerages, gas fees can spike.
What the Data Shows
Gas fees follow demand. The base fee rises by up to 12.5% per block when blocks are full and falls when they are not.
In April 2026, light demand on the main chain and a doubled gas limit kept fees near their lowest levels in years. They are far below the peaks of 2020 and 2021, but the rules that set them have not changed.
Sources
- Investopedia: Understanding Ethereum Gas Fees: Their Role and Calculation
- Ethereum.org: Gas and fees
- Ethereum.org: Network fees
- Dwellir: Ethereum Gas Fees Explained: How They Work, What EIP-1559 Changed, and How to Query Them
- Ledger Academy: Ethereum Gas Fees Explained: What They Are and How They Work
- Encyclopaedia Britannica: Ethereum Gas Fees: The Cost of Doing (Crypto) Business
- Blockscout: Gas and Fees, Explained
