December 3, 2022

Gas: The Fuel of Blockchain

The Balance Ecosystem encompasses a wide range of innovative products and developments in various DeFi and Web3 technology areas.
Balance is poised to build bridges between the theoretical and practical sides of finance so that there is a means in which we can provide real-world solutions and create value driven products within the web3 space.

Balance Capital

Every smart contract executed in the blockchain is not automatically processed. Just like buying concert tickets, every user falls in line in a virtual queue -  waiting for their turn to come. They are different in some aspects though. In the blockchain, the user’s queue number depends on how much gas fees they pay.

What are gas fees?

Gas fuels the blockchain like how gas fuels cars. Stepping on the gas pedal speeds up the vehicle. At the same time, it consumes more gas and ergo, money. Similarly, gas fees are just cryptocurrency paid by a user through the blockchain - determining the user’s queue number and transaction processing time. Gas fees also compensate for the service provided by miners or validators - people that power the blockchain itself.

Why is it cheap or expensive?

A block is like a bus that carries gas. Once the block is full of gas, it is ready to be processed in the blockchain - and the first occupants of the bus are those with the highest paid gas fees. Most blockchains today are built in a monolithic architecture. An oversimplified explanation for this design is that these blockchains only have a single queue where blocks fall in line. One block is made after another, and the only way to get ahead in line is to pay more than the average. More gas fees means less transaction processing time. Fortunately, many entities are building modular types of architecture that may alleviate blockchain traffic in the future.

Besides advancing in the queue line, there are certain transactions that naturally require a higher gas fee because of its complexity. The gas fees required also go higher when the computational power needed to process a transaction is larger. Publishing a smart contract would definitely consume more gas than executing a smart contract, and would be far more costly than just sending some tokens to another address.

Are gas fees customizable?

Yes, the user may set the lower and upper limit of the gas fees to be paid per transaction. It is, of course, still subject to the network’s own parameters. A quick tip to be able to optimize the gas fees paid is to check the blockchain explorer’s gas trackers. A few links will be dropped at the end of this article to paint a better picture on what these mean. These will allow the user to be informed of the best time to push through a transaction and the best GWEI (a metric for gas fees) to be used depending on the speed required. Knowing these would pave the way towards a more friendly experience in sailing through the blockchain.

Blockchain Explorer Gas Trackers




Binance Smart Chain:

Avalanche C-Chain: