What is gas?

The fee paid to a blockchain network to process a transaction.

Gas is paid in the chain's native token (ETH on Ethereum, SOL on Solana) and varies with network congestion. Gas is separate from exchange trading fees.

Strictly, gas is the unit of computational work rather than the fee itself. What you pay is the amount of gas your transaction consumes multiplied by the price per unit, and separating those two is what makes the whole system comprehensible. People say "gas is high" when they mean the price per unit is high; the work required has not changed.

How it works

Every operation the network performs has a fixed cost in gas units. A simple transfer is 21,000 gas on Ethereum (source: the Ethereum Yellow Paper); a token transfer costs several times more because it writes to contract storage; a swap costs more again.

The price per unit is where congestion shows up. Under eip 1559, the fee has two parts: a base fee the protocol sets from recent block usage and burns, and a priority fee you choose as a tip to the block proposer. Your total is gas used multiplied by the sum of the two, and you separately set a gas limit capping how much work you authorize.

Prices are quoted in gwei, which is one billionth of an ether. A fee of 20 gwei per gas on a 21,000-gas transfer is 0.00042 ETH.

Different chains cost wildly different amounts for the same operation, which is the whole argument for layer 2 networks. The unit of work is comparable; the price per unit is not.

Two things gas is not. It is not paid to the exchange, and it does not apply to trades inside an exchange, which are database entries rather than blockchain transactions. You meet gas at deposit and withdrawal, and whenever you transact from your own wallet.

Example

Illustrative arithmetic. You buy $200 of a token on an exchange at a 0.40% fee, which is $0.80, then withdraw it to your wallet. The withdrawal costs a network fee the exchange charges you, illustratively $4 on a congested Ethereum. The network fee is five times the trading fee. Withdrawing the same token to a layer 2, where the same transfer might cost a few cents, changes the arithmetic entirely, which is why the network you choose matters more than the venue's fee on small amounts.

Why it matters when you buy

Network fees frequently dominate the cost of small purchases and are the reason a $50 buy can be uneconomic to move into self custody. Compare what venues charge to withdraw at the fee comparison and what each network costs at the chain pages.

Related terms

gas limit — the work you authorize, base fee — the burned floor, priority fee — the tip you set, gwei — the unit prices are quoted in, network fee — the general term, withdrawal fee — what the exchange charges instead.

Questions

Do I pay gas when trading on an exchange?

No. Trades inside a custodial exchange are internal records and never touch a blockchain. Gas applies to deposits, withdrawals, and anything you do from your own wallet.

Why do I need the native token to move a token?

Because fees are always paid in the chain's own asset. A wallet holding a stablecoin and nothing else cannot send it until it also holds a small balance of the network's native token.

Why is gas cheaper on some chains?

Because the price per unit of work differs enormously between networks, driven by block space supply and demand. The work itself is comparable, which is why layer 2 networks can offer the same operations for a fraction of the cost.