Dropil/Ethereum Transactions: What is Gas?

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If you have followed all the necessary withdrawal steps and your transaction is still pending, it’s probably because the price of Gas has increased beyond the average price. Sometimes the price of Gas can fluctuate so quickly that when your transaction is processed, Dropil will send the current “fast” amount and it will not be enough once the transaction is broadcast to the Ethereum blockchain.

What are Transaction Fees and Gas?

Drops are an ERC20 token meaning they process on the Ethereum network. Ether (ETH) is the fuel for that network. When a Drop transaction is processed, a fee is assessed. That fee is calculated in “gas” and gas is paid in ETH. The transaction fee covers the cost of computation regardless of whether the transaction succeeds or fails. Computation is when a miner validates then executes a transaction. The amount of Gas used for an ETH transaction is 21000, and an ERC20 token is usually 36785 or 51785.

Overview

There are two parts that make up the cost of an ETH/ERC20 transaction:

  • Gas Limit
  • Gas Price

The total cost of a transaction (the “TX fee”) is the gas limit multiplied by the gas price.

The price of Gas is expressed in “GWEI” or 0.000000001 ETH. The price of Gas can have massive fluctuations. On average, the standard gas price for a transaction is between 2-10 GWEI. During times of fluctuation, gas prices can inflate to 100+ GWEI. When the gas price gets above 30 GWEI, you may experience transaction delays for any ERC20 transaction depending on how the transaction is processed by the sender.

Note: Dropil currently covers the transactions fees for all transactions originating from any Dropil user wallet.

Example:

Normal Transaction:

  • Gas Limit : 36785
  • Gas Price (Fast): 2.1 Gwei
    • Transaction fee (ETH): 0.0000772485 (36785 * 0.0000000021)
    • Current price of ETH (Fiat): $500
    • Transaction fee (Fiat): $0.0386
    • Time to Confirm: 2 minutes

Transaction during Inflation:

  • Gas Limit : 36785
  • Gas Price (Fast): 50 Gwei
    • Transaction fee (ETH): 0.00183925 (36785 * 0.00000005)
    • Current price of ETH (Fiat): $500
    • Transaction fee (Fiat): $0.9196
    • Time to Confirm (Seconds): 2 minutes

See live gas prices by clicking here

You can see how transaction fees using Etherscan:

The Technical Stuff:

Gas Limit
The gas limit is called the limit because it’s the maximum amount of units of gas you are willing to spend on a transaction. However, the units of gas necessary for a transaction are already defined by how much code is executed on the blockchain. If you do not want to spend as much on gas, lowering the gas limit won’t help much, it might actually cause your transaction not to go through if it’s not enough gas to cover computation. You must include enough gas to cover the computational resources you use or your transaction will fail due to an Out of Gas Error. All unused gas is refunded to you at the end of a transaction. *21000 is the gas limit for standard Ethereum (non ERC20) transactions.

Gas Price
If you want to spend less on a transaction, you can do so by lowering the amount you pay per unit of gas. The price you pay for each unit increases or decreases how quickly your transaction will be mined.

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