Ethereum Gas Fees Rise With Demand and Vary by Transaction Complexity

Ethereum transaction fees reflect both the computing work a transaction requires and demand for block space, so users may be able to lower costs by waiting for usage to ease or choosing a rollup.

Every Ethereum transaction uses gas, a measure of the computational work needed to process it, and fees are paid in Ether (ETH). A standard ETH transfer uses 21,000 gas; transactions that require more work can use more. One gwei equals 0.000000001 ETH.

The fee is calculated by multiplying the gas used by the sum of the base fee and the priority fee. Ethereum’s protocol sets and burns the base fee. The priority fee is a tip for the validator.

The base fee changes with block usage. Its target is half the block gas limit: when usage is above that level, the base fee rises; when usage is below it, the fee falls. It can change by as much as 12.5% per block. Ethereum’s London upgrade introduced this fee system in August 2021.

A transaction’s gas limit sets the maximum amount of gas it can use; it does not set the price per unit. Unused gas is returned. If a transaction runs out of gas during execution, its changes are reversed, but the gas supplied is still consumed.

Users may wait for block usage to ease, which can bring the base fee down. A rollup processes transactions off Ethereum’s main chain and submits them in batches, spreading Layer 1 costs across users and potentially lowering the cost per user. Ethereum’s Dencun upgrade added blob transactions in March 2024 to help reduce rollups’ data-posting costs. Layer 2 fees still vary by network and transaction.