The term “gas” refers to the network costs on a blockchain network. Gas fees often refer to the Ethereum network.
In order to carry out a transaction, a fee must be paid. The gas fee is the amount that is deducted from a transaction to process it. A transaction can be sending Ethereum, but it can also be the execution of a smart contract.
Ethereum (ETH) is the currency that supplies the Ethereum network with the “fuel”, also known as the “ETH gas fee”. Some actions that require more work, such as executing a smart contract, involve higher costs. That is why transactions via the Ethereum network on a DEX (a decentralized exchange that runs on the blockchain) usually have a higher gas fee than regular transactions.
When a transaction needs to be validated quickly, it is useful to include a higher gas fee. When the network is busy and many people want to send a transaction at the same time, gas prices rise due to demand. They then bid against each other to process the transaction faster, resulting in a higher gas fee.
Gwei is the unit used to indicate how much fuel it takes to complete a task. Because the gas fee consists of small numbers, it is usually expressed in “Gwei.” A gwei is one billionth of one ETH (0.000000001 ETH). This is similar to “sats” in the case of Bitcoin.
