How to save money when working with NFTs
First of all, I won’t go into what NFTs are, what they are used for etc. and if you don’t know anything about NFTs, wallets, the blockchain please read this awesome guide first.
However I will drop some words on the basics behind the fees, because they are important in this guide.
Why do I pay gas fees?
Ethereum uses a proof-of-work algorithm to validate all the actions performed on the blockchain. This is done by miners who offer computing power to do heavy math and help write these things into the blockchain. Every minted NFT, every transaction, every movement of an NFT from one wallet to another wallet, just everything that happens on the blockchain needs to be validated by the miners otherwise everyone could just add stuff they like and the whole concept wouldn’t work.
The miners however do this not just for fun and because they believe in Ethereum. They get paid. They need to, because they offer computing power which needs hardware and electricity to work.
So, every action you perform on the blockchain will cost you something and this price is the gas fee many fear when they think about minting their next NFT. But with knowledge about these things, you can use this to your advantage.
How are gas fees calculated?
When reading about gas fees many use the analogy of a car needing fuel. While this holds up to explain the basics, it fails on many ends.
The fuel in the Ethereum network is called gas and measured in gas units. That’s why it’s called gas fee... Simple as that.
Every action performed on the blockchain needs a certain amount of gas to be performed. A normal transaction needs roughly 21000 gas to be written in the blockchain while a NFT needs up to 10 times the amount.
The number of gas units a task needs to be fully processed is determined by the amount of lines to be written on the blockchain, so there is nothing we can do to lower this.
That’s why we shouldn’t change the gas limit when sending a transaction on Metamask for example. A good wallet (and Metamask is one) will estimate the amount of gas needed for the action you’re about the perform.
If you set this lower, than you can get away with it, if your action still requires less gas than your limit was. If you set the gas limit lower than the gas needed the miners will stop processing your transaction and you need to pay again. So, you'll lose the gas already spent...
If the miners need less gas than you set your limit to, the remaining gas will be 'paid back' to your wallet. Although it really never left it, that was just your wallet showing you less funds because you might need to spend it and it won't let you spend more than you have.
So, there is really no point in lowering the gas limit. That’s just kind of a safety line for you, not to pay an infinite amount of gas if something goes wrong, which it shouldn't, but you never know...
In summary: Leave the gas limit as it is estimated by Metamask. It’ll make sure your transactions are safe not to get aborted.
Ok, but that doesn’t help me lower my fees.
True.
The problem is that every block on the Ethereum blockchain (and others too) have a limited amount of space for transactions and stuff. That means there is a limit on how many gas units can be used in one block. And with only one block created every 13 seconds there is a limited amount of traffic...
And whenever there is a limit on anything, and everyone wants in there will be a bidding war.
That’s what the gas price is all about. It’s a bidding war where everyone wants to be first on the next block and their transactions to be handled as fast as possible. To determine who is first the gas units we give to the miners have a price, just like fuel for a car has one.
The gas price is measured in GWei, whereas one GWei is 1 (Nano)ETHER = 0.000000001 ETHER which equals 1,000,000,000 WEI = 1 (GIGA)WEI. One Wei is the smallest part of an Ethereum coin, same as 1 cent is the smallest part of our currency for normal people. Fuel stations, stockbrockers and alike deal with fractions of it but we just foget that for a moment.
Let's take a simple transaction as an example here.
A simple transaction needs roughly 21000 gas (at a maximum). So, you pay 21000 times what the gas will cost you. And this is where we can save some money.
The miners will prefer transactions where the gas price the user set is high. It makes sense, if you could sell one litre fuel for 5$ why give it to the guy who only offers you 3$...
This is nice for traders who move millions and don’t want to risk the price drop or lift while their transaction is being processed.
For us artist however this is bad, because we need to spend more money to mint our NFT or place a bid.
The gas price however is highly dynamic.
It changes all the time and there is not one price to be included in the next block and one where you stand aside forever.
That leads to the situation where transactions with a high gas price are processed within 2-3 minutes while some others take 15.
But what if I don’t care if my artwork is minted within 5 min or 5 hours? Can I just set a super low gas price and be patient?
Yes and no. You can set the gas price to whatever you want but there is a line where it may never get processed, because there are always transactions with higher gas prices available. What you can do however is set a low gas price and wait for maybe 12h and if it’s not processed by then just increase it a little. You can do this as much as you like until you reach a gas price that’s processed.
That’s also the point where the car analogy fails the most. In reality the price you pay for fuel isn’t connected to the time you need to get from A to B. On the blockchain however the price will determine how fast you’re processed. So the analogy should be more like: Imagine you’re trying to buy fuel and you get served by the amount of money you’re willing to pay for it. If someone offers more than you, he will get it sooner, but there are times not many people want to buy fuel so you finally get to buy yours. Doesn’t fit 100% but no analogy ever does…
Example. I bought an NFT and needed to claim it (transfer it to my wallet). Metamask suggested a gas limit of 270000 and I didn’t touch this (for reasons mentioned) and a gas price of 173 GWei.
So, I went only and checked the current gas prices (yes you can do it, here or here for example) and I saw the price for a slow transaction would be 143 GWei with a time of 30 min.
As the NFT was already mine I didn’t mind waiting days for the transaction. That’s why I set the gas price to 105 GWei. It wasn’t processed in the evening roughly 24h later so I went into Metamask hit the speed up button and set the gas limit to 112 GWei and voila, in the morning it was processed. So, I saved more than 1/3 of the price... I also got some unused gas back but that would have happened either way...
You can speed up a transaction as many times as you like without losing your funds. There are only two things you still should consider.
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If you accept maybe waiting for a year there is a slight chance the average gas price will rise, and you'll always stay below the minimum to be processed. This is quite unlikely because EIP-1559 in June will probably lower the gas fees and Ethereum 2.0 will get rid of them as miner grow obsolete (there still will be a small fee but nothing compared to what it is now)
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The important one. Your wallet can only perform tasks in the order you sent them. So, if you maybe want to claim an NFT and set the gas price low then want to mint your own fast and set it high the second one won't be processed because it's stuck behind the first. If you forget about it then you won’t be able to do anything at all in terms of transactions and minting with this wallet.
Please also note that a huge gas fee only speeds up your transactions to a certain amount. If you set it to 1000 instead of 180, you'll still have to wait 2-3 min for it to be processed. That's just how Ethereum works. So, there is no point in trying to place a bid, seconds before an auction ends.
Also always make sure to not set it too high!!! There have been reports of people trying to change their gas limit but instead changing the gas price to like 270000, that will cost you a fortune and you won't get it back... So always triple check everything and never do it in a hurry.
How to set gas price in Metamask.
As the most who read this will be using Metamask here is a quick guide on how to set up custom gas prices and an example of how the speeding up (increase of gas price because it wasn't processed) looks.
First we need to enable the advanced gas control in Metamask.
Click on the icon in the top right corner.
Go to settings.
Go to Advanced and scroll down to Advanced gas controls and enable it.
Fine. You can close it with the cross in the top right.
The next time you're performing a transaction it looks like this.
Under Advanced Options you can also se what youre gas fees are going to be.
I didn't want to create a transaction just for this guide, you know gas fees by now, but I still wanted to show how it would look if you want to speed up the transaction when it's not processed.
Click on the contract (transfer of NFT) or transaction or whatever in the Activity section of Metamask.
There you see some stats on your transaction, and where there is a speed up button if your transaction is not processed. Use it if necessary. I marked it with a red line, thats where mine was, before I increased it and it went through.
When you hit the speed up it will ask for the new gas limit and price, just increase the price and resubmit, don't worry you'll only pay the price you see now there is no double payment or anything.
Some final words.
This is just a guide by an artist whos also into crypto for a while. I don't take responsibility for any of your actions wether you followed this perfectly or not.
I think every bit of information is true, but if you find some mistakes please comment or write I'll update it accordingly.
If you find this information useful please share this post. The more people use custom and low gas prices the lower the average gas price goes and we're all happy.
Furthermore it took me about 4 hours to make this guide and like millions of hours of learning this information over the years so if you save some money with it and want to reward my efforts I'd be happy about a small donation.
Ethereum address:
0x841c79e4FA4ded5d387aaF96da49c14df3131759
PayPal address for Donations if you wan't to save on fees just send it as friend:
