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.