Gas Fees Explained
What Are Gas Fees?
To drive a car, you require fuel. To execute a smart contract on a blockchain protocol, you need to pay a fee known as Gas. In technical terms, Gas refers to the unit of measure on the amount of computational effort required to execute an operation or a smart contract. Wallets like MetaMask enable users to interact directly with the blockchain protocol, choosing which amount of gas they wish to pay. There are several websites where you can track gas prices.
The system works on a standard supply and demand mechanism. The price of gas can fluctuate from time to time depending on the network demand. If there are more people interacting on the blockchain executing smart contract operations, due to the limited amount of computing resources on the network, Gas price can increase. Conversely when the network is underutilized, the market price of gas would decrease.
Why Are Gas Prices So Expensive?
Gas fees can be set manually, and in a situation where the network is congested due to high utilization, transactions with the highest gas fee associated with it will be prioritized for validation. Validated transactions will be finalized and added to the blockchain. If gas fees paid are too low, the transactions will be queued up which can take a while to complete.
Therefore, transactions with lower-than-average gas fees can take much longer to complete compelling users to pay more to have their transactions processed quickly and efficiently. In many instances, gas fees can be outrageous. Rising gas fees demonstrate the need for blockchain networks to be scalable to process more transactions and at a lower cost.
At Vee Finance, we are leveraging the faster transaction rate and higher throughput of the Avalanche network providing a faster, more intuitive user experience at a lower cost.
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