Today, we’re discussing Gas fees. what are gas fees? where did the gas fee Go?
You always see the term being used in the crypto space with people being annoyed about their price and potentially putting you off using the UniSwap exchange.
Gas Fee:
“They are needed to successfully conduct a transaction on the Ethereum Blockchain”
•Where does the fee go?
Gas fees go to the miners as an incentive to validate transactions.
•Why are they so high?
Defi usage and high competition for block space have led to full blocks and congestion, which has increased gas prices.
Miners pick transactions with the most gas paid because it is more profitable for them to validate transactions by users who paid higher gas fees.
Miners can only fit so many transactions per block on the ETH chain, so they will always pick the most profitable ones.
Users know this information and in times of heavy traffic like new listings, users will manually increase their gas price to give their transaction the best possible chance of being picked.
Will they get any better?
•UniSwap V3: “Uniswap V3 launches on Ethereum on May 05 and later on Optimism, where fees will be significantly cheaper.”
•New exchanges eg. HathorSwap
•Projects creating layer 2 scaling solutions working on lowering TX fees and increasing scalability eg. MATIC (Polygon)
•LoopRing exchange built on a layer 2 solution
•Optimistic Roll-ups
•ETH 2.0, introducing Sharding and Proof of Stake (PoS)
UniSwap fees:
Uniswap charges users a flat 0.30% fee for every trade that takes place on the platform and automatically sends it to a liquidity reserve.
Whenever a liquidity provider decides they want to leave, they receive a portion of the total fees from the reserve relative to their staked amount in that pool.
People use UniSwap because of its unrivaled liquidity, which means you can buy and sell very close to the market price.
With the growing amount of crypto projects being created to tackle the Gas Fee issue, there is no doubt in our mind that extortionate fees will be a thing of the past!
