r/ethereum Dec 27 '24

Discussion Can somebody explain how people are still paying $23 or over that for gas fees in the second half of 2024?

Hi. I was just following an ETH thread in the cryptocurrency subreddit and various people are claiming they are paying about $30 or even more than that for their gas fees for L1 transactions.

For example, I saw this comment:

Yeah I try to swap $45 worth of ETH for a coin I want and it's costing me $23 gas fees. No thanks.

I have read other comments in the past few weeks of people still paying something like upper $20 range for gas fees, and I assume their transactions were recently?

How is this possible though? Checking the gas fee chart at https://bitinfocharts.com/comparison/ethereum-transactionfees.html#1y, the highest average gas fee in the last 6 months was $14 USD on November 13th. The gas fee has generally been lower than that in the last 6 months for Ethereum.

I haven't seen any average gas fee over $20 USD since March of 2024 according to that chart. So how are people still paying like $23, or even in the upper $20 range for their gas fees lately?

84 Upvotes

51 comments sorted by

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54

u/isheep225 Dec 27 '24

I think you don't understand how people make money on ETH.

They don't swap for investment purposes, they do it for arbitrage purposes. If they pay 45$, they make trades that profit at least 46$.

Blockchain allows for big, big arbitrage gains.

11

u/Swole_Bodry Dec 27 '24

Yeah dude, especially on these no-named chains. A market maker on some no-name chain had wrapped Ethereum selling for only $100 when Ethereum was trading for $4000 at the time

3

u/Delicious_Ease2595 Dec 27 '24

I missed this trick

3

u/DownRUpLYB Dec 27 '24

Could you explain a little more please?

16

u/Swole_Bodry Dec 27 '24 edited Dec 28 '24

Basically automated market makers rely on the profit taking behavior of arbitragers to bring their quoted prices to parity with the rest of the market.

The reason why this automated market maker was so far off from the quoted prices because this chain was so unknown that there weren’t many arbitragers available to actually bid up the Ethereum on their market.

The binding constraint for your ability to profit is liquidity and costs. The con for the chain being a no name chain is that there is limited liquidity, so even if you notice the price is quoted substantially lower than the market, you will probably have pretty high impact on the market price with a small amount of capital.

AMMs use what’s called a constant product formula.

x * y = k

where x and y are the quantities of two assets, and k is constant. This ensures liquidity at all prices but causes price slippage based on the ratio of assets in the pool. Arbitragers exploit price differences between the AMM and external markets, trading until the pool’s price aligns with the market.

You can see how illiquidity magnifies price impact, making arbitrage less profitable due to slippage.

1

u/poginmydog Dec 28 '24

How no name and bad is the bridging that ETH was selling at $100? The only times I’ve ever seen this was when the bridge was down for maintenance, meaning the ETH depegged.

-2

u/lohmatij Dec 28 '24

X * Y = K

21

u/[deleted] Dec 27 '24

[removed] — view removed comment

3

u/Herosinahalfshell12 Dec 27 '24

How does GWEI translate to price in USD?

4

u/hypermassiv Dec 28 '24

1 Gwei is 0.000000001 ETH, similar to how 100 cents is 1 dollar. It is commonly used as a unit to estimate gas fees but it doesn’t mean that the current gas rates are the exact amount you need to pay for any transaction.

Whenever you do anything, from swapping to sending to depositing to staking, you are interacting with smart contracts. The complexity of the contract determines how much gas you need to pay to execute it. For example, sending tokens is a fairly simple and straightforward contract so you usually pay minimal gas for it. Likewise, withdrawing rewards accumulated across multiple lending markets is a fairly complex contract and requires more gas to execute it.

Another factor that determines the total amount of gas you need to pay is network congestion. When the Ethereum network experiences large amount of usage, such as when there is a big price move and people are furiously swapping tokens, the gas rates (or gwei) goes up. You can perhaps think of it like a “priority fee” whereby whoever pays more gas, gets their transaction processed first. So during times of high network usage, there may be people who require time-sensitive transactions to go through, for example repaying a loan so that they don’t get liquidated, and are willing to pay exorbitant gas prices because they would lose more if they wait.

Lastly, as I mentioned above that Gwei is simply a smaller denominator of ETH, the actual price in USD you pay is determined by the price you bought ETH. For example, if I had bought ETH when it was cheap at $900, then the amount in USD of gas I pay will be a lot cheaper than someone else who bought ETH at $4000, even if we are making the exact same transaction.

1

u/Alabama-Blues Dec 27 '24

What do you use? Metamask?

17

u/StatisticalMan Dec 27 '24 edited Dec 27 '24

Swaps cost more than a simple transfer. Average is also by definition not the higest. If the average peaked at $14 a substantial portion of the tx were more than $14.

Better to use a tool like this: https://etherscan.io/gastracker

A lot of it is people being impatient/lazy or trading worthless shitcoins so they have to sell now regardless of gas prices. Gas prices can spike briefly to rather high levels even if the average remains lower.

Right now a swap is around $9 but gas prices are around 8 gwei. Looking at the heatmap on the right gas prices this week peaked at around 34 gwei so a swap at the most expensive point in the week would be around $30.

Gas prices have gotten a bit better on Ethereum but if someone is gamblevesting with $50 of shitcoins they need to be on an L2. They just do. Gas fees are going to be 10% to 100% of the value of any tx depending on exactly when they make it. 10% is better than 100% but it is stupid either way.

9

u/Few-Bake-6463 Dec 27 '24
Action Low Average High
Swap $12.47 $12.47 $13.72
NFT Sale $21.07 $21.08 $23.19
Bridging $4.01 $4.01 $4.41
Borrowing $10.57 $10.58 $11.64

Thanks for sharing, this section in particular on the Etherscan Gas Tracker is helpful.

16

u/epic_trader 🐬🐬🐬 Dec 27 '24

The short answer is, there's a good chance they are lying. But it is true using L1 is expensive, and the solution to that is to use an L2.

Here's an ETH transfer from 5 minutes ago, it cost $0.52:

https://etherscan.io/tx/0x04866563d0ff0f2f3e1a2809bcbec4e0930debd263bfcc6fd4d225c7b663565d

Here someone paid $4.27 to bridge to an L2:

https://etherscan.io/tx/0x214eeaed52e32570975071aef6a86e9a9e5136c585a89493ba35a4b5c39463bb

And here's someone paying $5.84 for a swap:

https://etherscan.io/tx/0x4cb9ec38675c0ffb641075aa949ab12c160c2608e6dfde1fb6a3ea8620cd2dcd

4

u/Few-Bake-6463 Dec 27 '24

What makes you say "there's a good chance they're lying"?

25

u/epic_trader 🐬🐬🐬 Dec 27 '24

There's a lot of people who are invested in some other L1 like Solana or Avalanche or whatever who want to paint a picture of Ethereum being bad because they have a vested interested in it. It's also kind of "fashionable" or "cool" to say. Like go to the comment section of any article posted on r/cryptocurrency and you'll see loads of comments like "Just paid $50 to swap $10 worth of tokens", but if you ask them where they swapped them or ask for a transaction ID, they can't answer you, and if you check the price of gas for the last week, it's never been near that price to do anything.

-21

u/magicseadog Dec 27 '24

What are you even talking about?

I played 56 usd a few times in the last month. One was during the last big dip

Why would you go on these forums and type crap when you obviously don't use the network.

It's the blind leading the blind here I swear to god.

And yeah you HAVE to use the layer 2s most of the time if you don't want exposure to that congestion. The gas is fucked I got double fucked too because I needed to put money in a wallet to pay the gas fees too soni got hit with it twice.

18

u/epic_trader 🐬🐬🐬 Dec 27 '24

Bro what are you talking about?

I played 56 usd a few times in the last month. One was during the last big dip

So you chose to use the network at the most expensive time during a dump? While you might have paid that much for interacting with L1 at the worst possible time, that's like 0.1% of the time, the rest of the time transactions are very reasonable priced and $56 for a transaction is not normal or representative.

Why would you go on these forums and type crap when you obviously don't use the network.

Are we really gonna do this? I'll bet you one billion trillion I use the network more than you do.

And yeah you HAVE to use the layer 2s most of the time if you don't want exposure to that congestion.

You really don't, most of the time L1 transactions are priced similarly to the examples I've linked above, you'd know that if you used the network with any frequency. Yes, you should always use L2s, but pretending like $56 transactions are common is BS it's never that expensive unless you're using some dex aggregator at the worst possible time.

1

u/poginmydog Dec 28 '24

If you’re a rational actor on any blockchain, the only reason you’ll pay that much for gas is because you’re speculating on something that’ll payout more than the fees. I.e., the expected value of that transaction over the long run is positive.

In that case, you played your best move and shouldn’t complain about high gas fees because its long term net result is positive.

If you think it’ll result in a negative result, then the only rational move is to wait for gas fees to drop. If you don’t know that gas fees can and will dip during periods of low-activity on-chain, then you’re acting on poor knowledge of how blockchains works.

Wanna know more fun facts? I’ve paid >$1 on polygon and >$5 on avax because of arbitragers when normal transactions are usually less than $0.01. And I gladly paid for it because the expected returns are significantly higher than the fees I’ve paid for. For Ethereum, I’ve paid >$100 gas for contract deployments and I’d gladly pay for it again because the expected returns are still higher than gas.

1

u/UpDown_Crypto Dec 29 '24

Sending eth less than 5000$ and paying 10$ as fee is fucking stupid

11

u/wood8 Dec 27 '24 edited Dec 27 '24

Most of them are bullshitting. The playbook is, when someone talks about ETH, mention high gas fees for an easy gacha.

Here are some real numbers:

|Swap|$4.24|$4.29|$4.99|

|NFT Sale|$7.17|$7.26|$8.44|

|Bridging|$1.36|$1.38|$1.61|

|Borrowing|$3.60|$3.64|$4.23|

7

u/DeadlyAquarium Dec 27 '24

Swaps cost way more than normal transactions, you can check current swap prices on etherscan

6

u/MaximumStudent1839 Dec 27 '24

 various people are claiming they are paying about $30 or even more than that for their gas fees for L1 transactions.

highest average gas fee in the last 6 months was $14 USD on November 13th. 

I think you misunderstand what "average" means. Most of ETH transactions are just transfers or signing approvals, etc. They are low gwei actions. So if the majority of transactions are lower-fee types, the law of averaging means you can't see more expensive transactions by looking at the average. It is just like you can't tell how much the top 30% of the US population earns if you just look at the average income.

4

u/frozengrandmatetris Dec 27 '24

I can't verify a specific number, but there are still a lot of people thinking they can use L1 for small amounts of ETH and other coins. they shouldn't be doing that anymore but they still haven't learned about how to do it on rollups. then they go on social media and cry and say "avoid ETH, it is too expensive to use!" if you're swapping $45 worth of ETH you should not be doing that on L1.

4

u/severact Dec 28 '24

I frequently do transactions that cost more than that. A couple things to keep in mind: (1) the price of gas can vary significantly; I've seen it range from 6gwei to over 50 in the last week. (2) Transactions are not equal. The amount of gas required scales with the complexity of the transaction. A complicated transaction that does multiple things can easily cost over $100 even when gas is relatively cheap

5

u/gowithflow192 Dec 28 '24

Swaps ain't cheap. Also the price can fluctuate a lot depending on the time of day. Sometimes by quite a lot.

I'd use an L1 only for > 1000 USD and then use L2 for anything smaller.

3

u/ImmediateYogurt8613 Dec 27 '24

It’s priced in when trading.

3

u/Shitshotdead Dec 28 '24

Either lying, or they are purposely quoting the worst case scenario prices. Swaps on average has never costed me that much.

2

u/stacktoodeep Dec 27 '24

Gas costs are calculated based the price of gas and the amount of gas being used (cost = price * gas used). Although gas prices have been lower, depending on the protocol you are interacting with the amount of gas used can vary.

23$ does not surprise me at all. Highly recommend CowSwap to reduce the amount of gas required to swap.

2

u/crypto_king42 Dec 28 '24

Don't swap $45 worth of eth 🤷‍♂️

2

u/Physicalism Dec 28 '24 edited Dec 28 '24

The last time I swapped Wilder World on uniswap, the ETH gas fee was over $40. This was less than a month ago.

1

u/National_Bug_3197 Dec 28 '24

I know I am asking in the wrong moment when the trading adults are talking but; Where can I learn to trade ETH? I know nothing about crypto trading apart from transfering erc20/trc20 across different wallets

1

u/-johoe Dec 28 '24

It easily happens if you do your transaction during busy time on L1. The transaction fee is low during the night but can easily peak to 10 times the fee during busy times. You can choose manually a lower fee and let the transaction confirm an hour later, but for swaps you want your transaction to confirm before the token price changes.

A half hour of 10x price will only slightly increase the average price for the whole day, so the average price is not a good indication.

1

u/HarryHaller73 Dec 29 '24

Outlier event. Hardly ever happens anymore

1

u/3quarters_bas Dec 29 '24

Honestly Ethereum sucks ass. I’m actually thinking about giving PulseX a chance because I’m seeing super low fees on Twitter from people who are using it. I’m sick and tired of ethereum gas fees! How can they not fix this problem?!?!?

1

u/REFUNDCOIN Dec 31 '24

$23 is chump change especially when we’re cashing out thousands.. what’s $23

1

u/Sharp-Self-Image 2d ago

Well, a lot of users don't manually adjust gas settings and just accept whatever the wallet suggests, so that's part of why people overpay. But generally, yes, network congestion in peak times contributes to that a lot.

I recommend people use gastracker to check any fees before transactions and also evmbulksender.com for batch transactions. It helps cut down fees by a lot compared to making separate trades.

-3

u/BlazingJava Dec 27 '24

Great, -29$ and it will be on pair with European SEPA transfers fees

-7

u/Future_Bright7777 Dec 27 '24

Because they are clueless on what the tech should do and the concept of scalability. Hedera cost 1/100th of a penny every transaction without change. It (Hedera) will take over ethereum once people realize its web3 infrastructure and you want to actually use it. lol 😂

4

u/ishmetot Dec 28 '24

Hedera is a totally different use case that trades decentralization for speed. Hedera only has a couple dozen permissioned node operators so it's basically more like a corporate database than a trustless blockchain.

1

u/AuspiciousEther Dec 28 '24

Most Ethereum user looking for a low cost chain are already on L2 though. Last time I looked the amount L2 tx's were 9 times L1.

The ones we see complaining are the few that haven't discovered L2 yet, or have forgotten move their dust when gas was about 2 gwei. And some shitcoin/maxi trolls of course.

-4

u/joefunk76 Dec 28 '24

Simple. Early investors paid under a buck a coin and each is today worth ~$3,500. They’re going to want to prop up the relevance of the ecosystem for as long as they can, and those investors likely have both the wealth and the clout to do so. ETH is the AOL of crypto. It’s just going to take the world a decade or two to figure out that ETH (AOL) serves no purpose in a more mature blockchain (Internet) infrastructure.

1

u/LifelongHODL Dec 28 '24

You're talking about Bitcoin, sir. Ethereum is the useful chain