In the era of decentralized economy, gas fees have become an important indicator reflecting the health and activity level of blockchain networks, especially Ethereum. For developers, traders and financial institutions operating in this space, understanding the internal mechanisms that cause transaction cost fluctuations not only helps optimize profits but is also vital to maintaining operational efficiency. Gas fees are more than just a fee; it represents the market price of finite computational resources on the network. Tan Phat Digital notes that sudden spikes in gas fees are often the result of a severe supply-demand imbalance, where millions of transactions compete for a spot in the limited block space. Decoding these causes requires an in-depth look at the protocol structure, market participant behavior, and the latest technological trends in 2025 and 2026.
The Nature and Structure of Gas Fees in the Ethereum Ecosystem
To understand why gas fees spike, it is first necessary to analyze its components. Gas is a unit of measurement for the computational effort required to perform a specific operation on the Ethereum Virtual Machine (EVM). Each instruction executed in a smart contract consumes a certain amount of gas depending on its complexity.
Gas and Gwei Units: Relationship between Effort and Price
In the Ethereum system, computational effort is decoupled from market value to ensure that the cost of performing a logical task (like adding two numbers or writing data to memory) remains consistent even when the price of Ether (ETH) fluctuates widely. The unit of measurement for gas price is usually Gwei, where $1 \text{ Gwei} = 10^{-9} \text{ ETH}$. The total cost that the user must pay for a transaction is calculated by the product of the amount of gas consumed and the gas price at that time. The spike in gas fees felt by users mainly comes from the price per unit of gas (Gwei) increasing, not from changing transaction logic.
EIP-1559 revolution and modern fee structure
The London upgrade event in August 2021 introduced the EIP-1559 improvement proposal, completely changing Ethereum's gas pricing mechanism from a simple auction model to a more flexible and predictable system. Previously, users had to guess the fee themselves to get priority from miners, leading to overpayments or stuck transactions. With EIP-1559, transaction fees are divided into two main parts: base fee and priority fee (priority fee or tip).
Base fee is the minimum amount that the protocol requires for a transaction to be included in the block. The peculiarity of the base fee is that it is determined algorithmically based on the congestion level of the previous block and the entire amount is "burned", permanently removed from the circulating supply. Priority fees are additional bonuses paid directly to validators so that transactions are processed earlier in the queue. During normal network times, a small tip (about 0.1 to 1 Gwei) is enough to get the transaction done quickly. However, during "Gas War" periods, this priority fee is the battlefield where users compete fiercely.
Detailed fee components:
Base Fee: Determined by the network algorithm; increases when the block is more than 50% full. Economic impact: Burned, creating deflationary pressure for ETH.
Priority Fee: Set by users themselves to urge validators. Economic impact: Paid to validators, incentivizes network security.
Max Fee: The highest budget limit a user is willing to pay. Economic impact: Protects users from unexpected gas price fluctuations.
Detailed causes of gas fee spikes
Gas fee spikes are never random; it always accompanies specific events or changes in the network's demand structure. On deeper analysis, we can see a series of factors interacting to push costs to record highs.
Network congestion and fee adjustment algorithms
EIP-1559's fee adjustment mechanism is designed to maintain an average block fill level of 50% (equivalent to 15 million gas units). If demand exceeds this level, the base fee will increase to 12.5% for the next block sequentially. Although 12.5% may sound small, due to the nature of compound interest, if a chain of consecutive blocks is filled to 100% (30 million gas), gas fees can increase tenfold within just a few minutes. This is the network's defense mechanism to prevent denial of service (DoS) attacks by making transaction spam extremely expensive.
Complexity of Smart Contracts
A common misunderstanding is that all transactions have the same cost. In fact, the amount of gas consumed is proportional to the amount of compute and storage resources the transaction requests from the EVM. A simple ETH transfer is always fixed at 21,000 gas, but interactions with decentralized applications (dApps) are much more complex. For example, executing a swap on Uniswap V3 requires the network to check multiple liquidity pools, calculate slippage, and update the status of multiple contracts, resulting in 5-10 times the gas consumption of a typical transaction.
Standard gas consumption for 2025 activity types:
Ether transfers (ETH): 21,000 units (1x Rate)
Transfer of ERC-20 Tokens (USDT, USDC): 45,000 - 65,000 units (~2.5x)
Transfer of NFT (ERC-721): 50,000 - 85,000 units (~3x)
Swap Tokens on Uniswap V3: 120,000 - 200,000 units (~7x)
NFT Minting: 100,000 - 300,000 units (~10x)
Complex DeFi Interactions (Lending, Yield): 200,000 - 500,000 units (~15x)
The rise of complex DeFi and NFT operations means each block will hold fewer transactions than before. As the market explodes, demand for these gas-intensive tasks increases, quickly filling block space and driving gas fees to spikes.
Surge in Demand: NFT Mints, Airdrops, and Gas Wars
The "Gas Wars" are responsible for the most dramatic and shocking increases in gas prices. This phenomenon occurs when a large number of users simultaneously attempt to carry out a time- or quantity-limited transaction, such as minting an extremely popular NFT collection or participating in an token sale (IDO). In these scenarios, the value of a successful transaction is much greater than the cost of gas, causing users to not hesitate to set extremely high priority fees to ensure they are the first in the block.
Ethereum history has witnessed classic Gas Wars, typically the "Otherdeed" land sale of Yuga Labs' Otherside project in May 2022. At that time, investor enthusiasm pushed the average gas fee from low a few USD up to thousands of USD per transaction. Some users paid up to 2.6 - 5 ETH (equivalent to $6,500 - $14,000 at the time) just to secure an NFT minting spot. This event not only caused congestion for those involved in minting NFTs, but also crippled the entire Ethereum network, making regular transactions too expensive for common users.
Market volatility and liquidation (Liquidation)
Another often overlooked cause is sharp fluctuations in crypto prices (flash crashes or rallies). When the price of ETH or other collateral assets plummets, lending protocols like Aave or Compound begin to trigger mass liquidation mechanisms. Arbitrage bots will compete fiercely to execute these transactions to make a profit. Competition between these bots often results in pushing up gas prices for a few minutes or hours, until the market stabilizes.
See also: What are Gas Limit and Gas Price? How to optimize Ethereum transaction fees in 2026
How to recognize gas fee increases early
In the blockchain market, information is power. Being able to predict and recognize early signs of gas fee increases can help users avoid unreasonable fees or capture important investment opportunities.
In-depth Gas Tracker Tools
Using real-time gas tracking tools is the first and most important step. Modern platforms not only provide current gas prices but also analyze mempool (transaction queue) data to make accurate forecasts.
Etherscan Gas Tracker: This is a standard tool, showing base fees, priority fees and confirmation time estimates for three priority levels (Low, Medium, High). Additionally, it lists “Gas Guzzlers” (smart contracts that are consuming the most gas), helping to identify which projects are causing congestion.
Ultrasound.money: A great tool to monitor ETH burn rates and underlying fee fluctuations. It provides a view of Ethereum's inflationary/deflationary trends, which are closely related to the vibrancy of the network.
TxStreet: A unique mempool visualizer that helps users see the competition in real time as a bus stop, where transactions with higher fees are boarded faster.
Blocknative Gas Estimator: A one of the most accurate tools for professional traders, providing forecast data for each next block with extremely low latency.
Market signal analysis and event schedule
Experienced users often look to external factors to predict network health. A simple rule is: whenever there is big news that causes excitement or panic in the community, gas fees will increase.
NFT Minting and Airdrop Schedule: Monitoring sites like Rarity Sniper, NFT Droppers or Telegram channels specializing in airdrops can help you know in advance the "danger" times when gas fees are likely to spike. If you do not intend to participate in these events, it is best to avoid making any transactions on the mainnet during that time.
Crypto Price Fluctuations: If you see the price of Bitcoin or Ethereum starting to fluctuate wildly (up or down more than 5% within 1 hour), be prepared for a spike in gas prices due to bot activity and emergency trading orders.
The Rise of Cryptocurrencies new trends: For example, the explosion of memecoins on Layer 2 networks or new protocols like Ordinals (on Bitcoin) often create a ripple effect, driving demand for bridging transactions and swaps on the Ethereum main network.
Check the rush hour pattern by time zone
Global blockchain activity has its own biological rhythms tied to major financial centers. Gas fees typically fluctuate on daily and weekly cycles. Based on data from 2025 and 2026, experts at Tan Phat Digital have determined the cheapest time frames to make transactions (in Vietnam time - UTC+7):
0h - 6am: America is off work, Europe is late at night, Asia has not yet woken up. Characteristics: Lowest (50-70% reduction compared to peak).
9am - 12pm: Asian markets are active (Korea, Japan, China). Characteristics: Average - Uptrend.
6pm - 10pm Night: Europe starts working, America prepares to open. Busiest hour. Characteristics: Highest (Spikes often occur).
Weekend (Saturday, Sunday): Financial institutions rest, trading activities decrease. Characteristics: Low (Usually 20-40% off compared to weekdays).
Planning to perform non-urgent transactions early on weekend mornings can help users save hundreds of dollars in accumulated costs each year.
The most effective strategies and tips for reducing Gas fees in 2025-2026
Understanding the causes and how to recognize them is a necessary condition, but to operate To be effective in the Ethereum ecosystem, users need to be equipped with proactive fee reduction techniques.
Transition to Layer 2 (L2) networks
This is the most effective and thorough solution. Layer 2 networks such as Arbitrum, Optimism, Base and ZK-Rollup solutions process transactions off-chain, compressing thousands of transactions and sending only a single proof to Ethereum Layer 1. This allows transaction fees on L2 to be 10 to 100 times cheaper than the main network, while still maintaining the high security of Ethereum.
2025 average transaction cost comparison data (assumes ETH at $3,000):
Ethereum Mainnet: ETH transfer fee $0.80 - $2.50; Token Swap Fee $5.00 - $15.00. (Highly dependent on congestion).
Arbitrum One: ETH transfer fee $0.05 - $0.15; Token Swap Fee $0.20 - $0.40. (L2's strongest DeFi ecosystem).
Optimism: ETH transfer fee $0.06 - $0.12; Token Swap Fee $0.15 - $0.35. (Stable fees thanks to OP Stack).
Base: ETH transfer fee < $0.05; Token Swap Fee $0.08 - $0.20. (Fastest growth rate 2025).
zkSync Era: ETH transfer fee < $0.08; Token Swap Fee $0.15 - $0.30. (Advanced ZK technology, low swap fees).
The use of bridges to transfer assets to L2 networks is no longer strange. In 2025 and 2026, most of the leading DeFi and NFT applications have integrated multi-chain, allowing users to perform virtually any operation on L2 at extremely low cost.
Customize "Gas Settings" in digital wallets
Many mainstream users often accept the default gas fee suggested by wallets (like MetaMask). However, wallets tend to be "over-safe" by giving high estimates to ensure transactions don't fail.
Manual Fee Editing: In modern wallets, you can select "Advanced" mode. Here, you can set Max Priority Fee (maximum tip level for validators) and Max Fee (maximum total fee level). If your transaction is not urgent, set the Max Priority Fee to a low level (e.g. 0.1 Gwei) and set the Max Fee close to the current base fee. Your transaction may take a few minutes or hours to be confirmed, but it will save you a significant amount of money.
Avoid "Panic Bidding": When seeing gas fees increase, many people panic and continue to push the fees higher to get the transaction done. This often creates an upward spiral in prices. Instead, consider whether the transaction is truly urgent or not. If not, wait until the congestion wave passes.
Leverage transaction aggregators (Aggregators) and optimization tools
In the DeFi world, smart transaction execution can help save gas through optimal contract logic.
DEX Aggregators (1inch, ParaSwap, Matcha): Instead of direct transactions on Uniswap, these aggregators scan the entire market to find the transaction route with the lowest total cost. Some aggregators also use gas compression techniques to reduce EVM resource consumption.
Using Account Abstraction (EIP-4337): The new generation of wallets uses account abstraction technology to allow "gasless transactions". In this model, a third party can pay the gas fees to the user, or the user can pay the fees in any token (like USDC) instead of having to keep ETH in the wallet at all times.
Batch Transactions: Some protocols allow you to bundle multiple actions (like Token Approval and Swap) into a single transaction. This eliminates excess base fees and reduces overall gas consumption compared to executing individual orders.
Obsolescence of Gas Tokens and Alternatives
In the past, users often used gas tokens like CHI or GST2 to "mint" gas when prices were cheap and "burn" them to receive a refund when gas prices rose. However, to prevent taking up network storage space, the London upgrade (EIP-1559) and later EIP-3529 drastically reduced the refund rate for data deletion or contract cancellation. Currently, the maximum refund is only 20% of the total amount of gas used, making traditional gas tokens no longer bring the same economic benefits as before. Modern users should focus on using Layer 2 and transaction timing techniques instead of relying on antiquated gas tokenization solutions.
The Future of Gas Fee Structures: Blobs, Sharding and More
Ethereum's development roadmap focuses primarily on reducing transaction costs and increasing scalability. Changes in 2025 and 2026 are radically reshaping the way we interact with blockchain.
The Age of Blobs and EIP-4844
The Dencun upgrade in 2024 introduced the concept of "blobs" (binary large objects), allowing Layer 2s to store data on the Ethereum mainnet at extremely low costs through a separate fee market called "blob fees". This has created a schism: Ethereum mainnet users still pay traditional gas fees, while Layer 2 networks use inexpensive blob space to keep fees below $0.01 USD.
However, the success of Layer 2 has created a paradox: when too much data is pushed into blob space, blob fees can also start to spike. This leads to the need for further upgrades such as Fusaka (expected late 2025), which aims to introduce PeerDAS (Data Availability Sampling) to expand blob capacity many times over.
Transition to "Settlement Layer" (Payment Layer)
By 2026, the concept of mainnet Ethereum has changed. It is no longer considered a place for retail users to make small transactions, but serves as a safe and secure payment layer for Layer 2 and large organizations. This shift means that while gas fees on the mainnet may remain high due to the huge value of each transaction here, the vast majority of the world's users will only interact with Ethereum through invisible and super cheap L2 layers.
The Impact of AI and Automated Agents (AI Agents)
An emerging trend in 2026 is the involvement of AI agents (AI agents) in managing gas fees. New generation AI bots are capable of automatically analyzing millions of on-chain data to determine the optimal time to execute transactions, automatically move assets between Layer 2 to search for the lowest fees, and use aggressive MEV strategies to reduce costs for end users. The presence of AI helps make the gas market more efficient, but can also lead to flash gas price increases as armies of AI bots react to a given market news.
See also: Learn completely about Gas Fee and calculation units in Ethereum
Analyze the economic impact of rising Gas fees
The sudden increase in gas fees not only affects users' pockets but also has far-reaching consequences for the entire system crypto ecosystem.
For retail investors
High gas fees are the biggest barrier to financial inclusion. When a swap costs 50 USD, people with only a budget of 100-200 USD are completely out of the game. This pushes retail users to alternative chains that are more centralized or forces them to stay on centralized exchanges (CEX), losing the benefits of self-custody.
For projects and developers
Gas fee instability makes user experience (UX) design difficult. NFT projects can fail miserably if their minting causes a Gas War, as the community will feel "betrayed" by having to pay gas fees that are more expensive than the NFT value. As a result, developers are now prioritizing building on Layer 2 from the ground up or adopting innovative NFT minting mechanisms like "Lazy Minting" or "Dutch Auctions" to alleviate congestion.
Impact on ETH Supply (The Ultrasound Money narrative)
High gas fees have a positive side for long-term ETH holders. According to mechanism EIP-1559, when the network is busy, the amount of ETH burned will increase. During peak periods, the amount of ETH burned can exceed the amount of new issuance to validators, causing the total supply of ETH to decrease. This phenomenon is called "Ultrasound Money" by the community, creating a sustainable economic value for the network and helping ETH become a more attractive store of value in the eyes of financial institutions.
10 Frequently Asked Questions (FAQs)
Below are the most common questions users often ask when learning about gas fees, compiled by Tan Phat Digital case:
What is the actual average gas fee in 2026? After upgrades like Fusaka, gas fees for simple transactions on the Ethereum mainnet have dropped significantly, at one point to around $0.01. However, this fee still fluctuates depending on the level of network congestion at each specific time.
How does the Fusaka upgrade help reduce gas fees? Fusaka introduces PeerDAS and increases the gas limit of each block from 45 million to 60 million units. This allows each block to hold more transactions, thereby reducing the pressure on fee competition and lowering costs for users.
Why do I still see gas fees skyrocketing even though Layer 2 is in place? Layer 2s address retail needs, but the Ethereum mainnet is still where extremely high-value transactions, institutional payments, and blob data storage take place. When Layer 2 simultaneously pushes data to the main network during market fluctuations, Layer 1 gas fees can still increase suddenly.
What are the top "Gas Guzzlers" today? Smart contracts of Tether (USDT), Circle (USDC) and Uniswap still lead the list of gas consumers. Stablecoin transfers and token swaps typically account for 20% to 40% of total daily trading traffic.
Is Ethereum still considered "Ultrasound Money"? There is much debate around this issue. Although the fee burning mechanism of EIP-1559 still works, after the fee reduction upgrades (Dencun, Fusaka), the amount of ETH burned has decreased. ETH's inflation rate sometimes reached about 0.74%, but was still within safe control.
Is it still effective to use Gas Tokens (CHI, GST2) in 2026? No. Since the London upgrade, the rebate scheme has been limited to 20% of total gas usage. Using traditional gas tokens no longer provides significant economic benefits compared to using Layer 2 networks.
How to avoid getting stuck in transactions during a Gas War? The best way is to set
Max Priority Feeabout 10-20% higher than the network average from the beginning. However, Tan Phat Digital recommends that you use wallets that support transaction simulation to avoid fees for failed transactions. Era regularly records transfer fees ranging from just $0.04 to $0.07. More popular networks like Arbitrum and Optimism also maintain very low fees, often under $0.15.How does AI Agent help in managing transaction fees? AI Agents can automatically "hunt" for time frames with the lowest gas fees to execute pre-scheduled orders, or automatically switch between Layer 2 to find the route with the most optimal cost for users. use.
Gas fees are an inevitable part of using a decentralized and secure blockchain network like Ethereum. The spike in gas fees is a signal that the network is being used intensively and is highly valuable. Tan Phat Digital offers the following recommendations for users to optimize costs:
Be proactive: Always install gas monitoring utilities on your browser or use mobile applications to receive alerts when gas fees drop to the desired level. Keep an eye on major event schedules to avoid trading at scheduled Gas War times.
Layer 2 selection is the default: Don't make transactions on the Ethereum mainnet unless there is an absolutely compelling reason (like moving very large amounts of money or interacting with a protocol not yet available on L2). Choose Base, Arbitrum or Optimism to experience smoothness at extremely low costs.
Time Optimization: If the transaction is not urgent, wait until dawn (UK time) or weekends to take advantage of 30-50% lower fees.
Use new technology: Explore smart wallets that support account abstraction to pay gas fees with stablecoins and use transaction aggregators to always get the most optimal prices.
The Ethereum ecosystem is rapidly evolving to solve the gas fee problem. Follow Tan Phat Digital to update the latest technology trends and Web3 solutions. While spikes in fees may still occur in the future, the combination of Layer 2 solutions and infrastructure upgrades are making blockchain more accessible than ever to users globally.
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