What is Gas in Ethereum?

It powers the Ethereum network; but what is Gas, and how does it work?

Oct 23, 2020

What is gas?

Gas is a term for Ethereum network fees. Every action on Ethereum (whether sending tokens or interacting with a smart contract) requires such a fee. Gas therefore acts like the fuel for the network - hence its name.

What determines how much I need to pay?

Two factors shape how much you'll need to pay for an action: the gas price, and how much gas that action requires (this is known as the gas limit).

Gas prices are determined by supply and demand. The busier the Ethereum network, the higher the gas price.

The amount of gas required depends on the computational complexity of the transaction. The easier, the lower the gas needed.

For example, sending an asset to a friend will cost less gas than buying a Set token. This is because a lot more work is required for the latter.

Who receives the gas fees?

Ethereum miners, who provide the computational power that Ethereum runs on, receive this transaction fee in return for their efforts. This means they're incentivised to start with the highest-paying requests first. So if you want to ensure your transaction has the best chance of being included by them, you have to pay more. Argent helps with this, as explained below.

How does Argent help me with gas?

Argent's aim is to make crypto as simple as possible. As part of this we've tried to totally eliminate the complexity of gas. We've done this in two ways:

1. Paying the gas for you

For some features we pay the gas for you and keep it entirely hidden so you don't have to think about it. Features we pay for include:

  • Wallet creation
  • Security (our security model is blockchain-based so security features such as recovery, wallet locking, and changing your daily limit require gas. We handle it for you).

Our partners may also pay for some DeFi Dapps, that, for example, help you to earn interest and invest, among other use cases. The most up to date list of which DeFi Dapps are included can be found here.

The list will evolve as we work with partners who want to subsidise it to help people access their projects.

2. Automatically selecting gas and ensuring transactions go through

For the limited number of DeFi features where you need to pay the gas, we automatically pick the right gas price for you. And if for any reason it ultimately requires more gas to go through quickly, for instance if there's sudden network congestion, we'll increase the amount and pay the difference.

We will never profit from gas. Our aim is to align smooth user experience, long-term economic sustainability, and incentives to minimize Ethereum network congestion. You can read more about our fair use policy here.

Further reading

1. (Beginner) - District0x on how Gas works

2. (Novice) - Crytptotesters on understanding Fees and Gas

3. (Intermediate) - Eric Conner explains how Gas and the Fees market operate

4. (Advanced) - StackExchange on "What is meant by 'Gas'?"

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