As the number of users/projects depending on Ethereum increase, related resources become scarcer. Ethereum still stands limited to transaction rate. The limit is twelve transactions per second and spreads across global entities.
Gas fees refer to the amount of Ethereum a user has to pay for performing an activity on the ETH network. Gas fees are denominated as “gwei”. These activities may include sending ETH or DeFi token trading. It may also include NFT minting or the deployment of a smart contract. With ETH’s demand recording new highs, ETH gas prices also rise. Paying the huge fees every day will see a trader or investor get little to no profits. It is also costly for a cryptocurrency native that uses the network. There are certain strategies that can apply to reduce gas fees.
Transaction Timing Optimization
ETH gas prices tend to fluctuate many times within a day. This hinges on the changes in events taking place on-chain. It is also influenced by activities taking place globally in different time zones. As such, it is possible that a time exists when ETH gas prices are generally low in an average sense. Smart traders take stock of such times and focus their transactions around these times. In doing so, they take advantage of the opportunity to reduce their gas expenses.
Noteworthy, gas prices tend to be higher within weekdays and lower during weekends. Targeting your transaction batches between Saturday and Sunday saves you from huge fees.
Using Gas Tokens
This involves minting gas tokens at the time when gas prices are at their lowest point. You then redeem the tokens once prices are high. In doing so, you will get ETH refunded in compensation for your gas expenses. Gas tokens are only functional because of the storage refund system. The system is ETH-supported. The system refunds ETH users who delete their storage variables. This motivates people to avoid bloating the state of Ethereum.
Using Apps with Gas Rebates
Some Ethereum projects provide gas rebates in compensation for the pain of gas fees. At the top of this project list are Balancer and Furucombo. These refund users’ gas fees on specific token pairs. As such, you should use either of these two platforms for any DeFi trades. Balancer refunds BAL tokens while Furucombo refunds COMBO tokens. Although still young, the two projects have a successful track record so far
Leverage ETH Scaling Solutions
While the scaling solution for ETH remains young, the running projects are reliable. They also maintain a daily positive trend. A trader can leverage these solutions to capitalize on super cheap transactions. The ETH-based transactions are also super-fast. Among these solutions include the layer-two (L2) solutions- projects on optimistic rollups (ZK-rollups). L2 solutions feature ultra-efficient resources while offering all ETH security provisions. Other solutions include side chains including PoS by Polygon or xDAI. Although these are different Blockchains, they tend to the ETH network.
Using Decentralized Apps that Reduce Gas Fees
Certain dApps on Ethereum dedicated to providing products with minimized gas prices. Among these apps include KeeperDAO, and V2 Vaults belonging to Yearn. These apps automate users’ transactions and batch them together. In doing so, all gas fees get paid together as a single transaction. This lowers the gas prices by a significant margin for everyone transacting.
There is also the Balancer V2 Dapp. This trading protocol features a V2 system. The system makes Balancer a single large vault as opposed to many constituent pools. In doing so, gas fees become cheaper.
Using DeFi Saver to Test Transactions
This involves using simulations for testing out transactions. In so doing, you get a sense how much gas fees you would have to pay. Recipe Creator and Simulation Mode by DeFi Saver enables this. Recipe Creator serves to line up your intended activities on ETH network. Next, the Simulation Mode runs testing out the activities only that gas fees are not paid.
While this may not be a direct way of saving gas, it helps you streamline transactions. Costs get mitigated in this way.
While gas fees can be stressful, they are relevant. This is in facilitating effective operation of the Ethereum network. They do so by preventing spam transactions. Gas fees are also useful in paying miners for their role in securing the network. In future, gas fees will also serve to pay stakers, but this will be after the ETH2 integration.