Why are Ethereum gas fees so high now? A complete analysis of ETH gas fees in 2024

Ethereum is the second largest cryptocurrency by market capitalization, only behind Bitcoin, and is also the most active smart contract platform. But if you’ve recently made transactions on the ETH network, you’ve probably been shocked by the exorbitant gas fees. So the question is: Why are Ethereum gas fees so high right now?

Currently, ETH is priced at $2.93K, with a 24-hour decrease of -1.44%, and a circulating market cap of $353.18B. But regardless of price fluctuations, gas fee volatility is often even greater.

What exactly are Ethereum gas fees?

Simply put, gas fees are the “transaction fees” you pay for any operation on the Ethereum network (transfers, contract interactions, NFT minting). This fee compensates miners for the computational resources needed to process your transaction.

Gas fee = units of gas × price per unit of gas

For example: a standard ETH transfer requires 21,000 gas units. If the current gas price is 20 gwei (1 gwei = 0.000000001 ETH), then the total fee is 21,000 × 20 gwei = 0.00042 ETH.

It doesn’t sound like much, but when the network is congested, gas prices can spike to hundreds or even thousands of gwei, making transfers cost dozens of dollars.

Why do gas fees suddenly spike? Three main reasons

1. Surge in network demand

When a large number of users flood the network simultaneously—like a traffic jam on a highway—everyone wants to get on the chain first, bidding up the price. You increase your gas bid to ensure quick confirmation, and others do the same, pushing the gas price sky-high.

2. Increase in transaction complexity

Not all transactions cost the same. A simple ETH transfer needs 21,000 gas, but interacting with DeFi protocols (like swapping tokens on Uniswap) might require 100,000+ gas units. ERC-20 token transfers typically need 45,000-65,000 gas. The more complex the transaction, the more gas it consumes, and the higher the fee.

3. NFT craze and meme coin hype

Whenever NFTs or meme coins explode in popularity, the network becomes overwhelmed. Thousands of people rush to mint NFTs or trade new tokens, causing congestion and skyrocketing gas fees.

What did the EIP-1559 upgrade change, and why are fees still high?

The London hard fork in August 2021 introduced the EIP-1559 mechanism, aiming to make gas fees more stable and predictable. The new system is divided into two parts:

• Base fee: Adjusts automatically based on network demand, with a portion burned each block
• Tip: User-set optional fee to prioritize confirmation speed

This design indeed made the fee structure more transparent, but the core issue remains: during network congestion, fees still spike.

What solutions are available now?

Solution 1: Wait for off-peak times

Between 3 PM and 6 AM (US time), network traffic is usually lower, and gas fees are much cheaper. You can check real-time prices with Etherscan’s Gas Tracker.

Solution 2: Use Layer 2 solutions

• Optimism and Arbitrum (Optimistic Rollups): bundle multiple transactions off-chain and submit them together to the mainnet
• zkSync and Loopring (Zero-Knowledge Rollups): use cryptographic proofs to verify transactions more efficiently

On these Layer 2s, transaction fees can drop to a few cents, while on the mainnet, it might cost a few dollars. Transactions on Loopring can even be under $0.01.

Solution 3: Wait for Ethereum 2.0 and Dencun upgrades

Ethereum 2.0’s transition from PoW to PoS will greatly increase network throughput. The Dencun upgrade introduces proto-danksharding technology, boosting throughput from 15 TPS to 1000 TPS, which can reduce gas fees by over 90%.

Comparison table of gas fees for different operations

How to smartly manage gas fees?

Step 1: Monitor in real-time
Use Etherscan, Blocknative, or Gas Now to check current gas prices. These tools show recommended prices for slow, standard, and fast modes.

Step 2: Choose the right timing

• Weekends or early mornings tend to have lower transaction volume and fees
• Avoid NFT launches, major token airdrops, or meme coin hype periods

Step 3: Optimize gas settings
Wallets like MetaMask allow custom gas fee settings. You can set your base fee + tip according to urgency.

Step 4: Migrate to Layer 2
If you frequently do small or high-frequency transactions, Layer 2 solutions save a lot of money. But be aware of cross-chain risks and liquidity considerations.

What’s the bottom line?

Ethereum remains the most powerful smart contract platform, but gas fees are indeed a pain point. The good news is that it will improve in the future:

• Short-term: Use Layer 2 solutions (Arbitrum, zkSync)
• Mid-term: Wait for further upgrades like Dencun
• Long-term: Ethereum 2.0’s full rollout will bring fees down to below $0.001

The current high gas fees are more a product of the developmental stage. As technology advances and the ecosystem matures, Ethereum will become cheaper, faster, and more user-friendly. Instead of complaining, it’s better to learn how to use the right tools and timing to save money.