What Are Gas Fees in Crypto? How They Work

Gas fees are the transaction fees you pay a blockchain network to process and record your transaction, priced in units of computation called gas and paid in the chain's native token. They go to the network (validators, or burned by the protocol), not to the app you are using, and they apply to every on-chain action from a simple transfer to a complex DeFi swap.

Gas fees definition

"Gas" is the unit that measures how much work a transaction asks the network to do. A plain token transfer uses little gas; a swap that touches several smart contracts uses much more. The gas fee is that amount of gas multiplied by a price per unit of gas.

The term comes from Ethereum, where gas is priced in gwei (one billionth of an ETH). Other chains use the same idea with their own units: EGLD on MultiversX, SUI on Sui, XRD on Radix. Gas fees exist for two reasons: to pay the operators who run the network, and to make spam expensive so the chain cannot be flooded with junk transactions.

How gas fees work

The general formula is fee = gas used × gas price, but each chain fills in the details differently:

• Ethereum. Since the London upgrade (EIP-1559, 5 August 2021), each block has a protocol-set base fee that rises when blocks are full and falls when they are not. The base fee is burned. You add an optional priority fee (tip) that goes to the validator. Your wallet also sets a gas limit; unused gas is not charged.
• MultiversX. The fee is gas used times gas price, with a network minimum gas price of 1,000,000,000 atomic units and a minimum gas limit of 50,000 for a simple transfer, which works out to 0.00005 EGLD. Smart-contract calls need more gas, and some unused gas is refunded.
• Sui. Fees have two parts: computation (gas units times a reference gas price that validators agree at the start of each epoch) and storage (paid up front for data you create on-chain). If you later delete that data, 99% of the storage fee comes back as a storage rebate.

On every chain, the steps look similar:

1. Your wallet estimates the gas a transaction will use and the current price.
2. You approve a maximum fee when you sign.
3. Validators execute the transaction and charge the gas actually used, even if the transaction fails partway.

Gas fees example

Say you send ETH on Ethereum when the base fee is a hypothetical 20 gwei and you add a 2 gwei tip. A plain ETH transfer uses 21,000 gas.

• Fee: 21,000 × (20 + 2) gwei = 462,000 gwei = 0.000462 ETH.
• Of that, 21,000 × 20 = 420,000 gwei (0.00042 ETH) is burned, and 42,000 gwei goes to the validator.
• If a busy period pushed the base fee to 200 gwei, the same transfer would cost about 0.0042 ETH, ten times more, for exactly the same action.

Now say you make a DeFi swap that uses 150,000 gas instead. At the same 22 gwei, it costs 0.0033 ETH. On a $200 position, fees like these can eat a large share of any yield, which is why small users often prefer lower-fee chains.

A simple EGLD transfer on MultiversX, by contrast, costs 50,000 × 1,000,000,000 = 50,000,000,000,000 atomic units, which is 0.00005 EGLD.

Why gas fees matter

• They set the minimum useful position size. If entering and exiting a farm costs $20 in gas, a $100 deposit needs a 20% return just to break even.
• Failed transactions still cost gas. If a swap reverts because of slippage or an expired quote, the computation done so far is still paid.
• You need the native token. You cannot move a USDC balance without some ETH, EGLD or SUI for gas. Keep a small reserve.
• Fees differ hugely between chains. This is a key reason DeFi has spread across many networks; see multi-chain DeFi explained.
• Compounding has a gas cost. Claiming and reinvesting rewards manually costs gas each time, so pooled auto-compounding can be cheaper for small positions.

Gas fees on JewelSwap

Using JewelSwap means paying the normal network fee of whichever chain you are on: EGLD on MultiversX, SUI on Sui, XRD on Radix. Those fees go to the network, not to JewelSwap. For an overview of what JewelSwap runs on MultiversX, see JewelSwap on MultiversX; for Sui trading venues and their costs, see the Sui DEX comparison.

Related terms

• Epoch — on Sui, the period for which the reference gas price is fixed.
• MEV — value validators and bots extract by ordering transactions, often tied to gas bidding.
• Slippage — the price cost of a trade, separate from the gas cost.
• Crypto bridge — moving assets between chains, which costs gas on both sides.
• Auto-compounding — pooling reinvestment so each user pays less gas.

Learn more on the JewelSwap blog

• Multi-chain DeFi explained — why DeFi spans many chains and how fees shape where users go.
• Sui DEX comparison 2026 — how Sui's trading venues compare on fees and depth.
• JewelSwap on MultiversX — the JewelSwap products available on MultiversX.

Frequently asked questions

What are gas fees in crypto?

They are the fees paid to a blockchain to execute and record a transaction, calculated as the gas a transaction uses multiplied by the gas price, and paid in the chain's native token.

Gas fee vs transaction fee: what is the difference?

On smart-contract chains they are usually the same thing. "Gas fee" emphasises that the cost depends on computation used; "transaction fee" is the general term, also used on chains like Bitcoin that price fees by transaction size instead.

Why are gas fees so high sometimes?

Because block space is limited. When demand spikes, fee mechanisms like Ethereum's base fee rise to ration space, and users bid higher tips to get included first. Complex contract interactions also use more gas than simple transfers.

JewelSwap Crypto Glossary · educational, not financial advice. Updated 2 October 2026. Browse the full glossary.