When you’re minting an NFT, what’s actually going on is that you’re requesting a transaction in which your NFT deed is created, processed, and stored on a public Blockchain.
Simply put, a Blockchain is a group of computers in a decentralized network, but they can’t be used for free. As is the way of the world, there has to be some sort of mutual exchange, and the gas fee of an NFT is your end of the bargain. It’s simply the cost of using these computers to process the transaction.
How Much Will a Gas Fee Set You Back?
The first thing to establish here is that gas fees are never a fixed rate. For one reason or another, they are in a constant state of flux, much like, you’ve guessed it…the price of gas.
Historically, Ethereum themselves stated that the average gas fee for using the Blockchain to process a digital transaction was roughly 8 Gwei. I know what you’re thinking…what in the digital world is Gwei? Well, answering this question requires a brief digression.
The Ethereum system has its own native currency known as Ether or ETH in shorthand. A denomination of ETH, a Gwei is equal to about 0.000000001 ETH, so instead of having to say, “I paid 0.000000008 ETH to mint my NFT on the Blockchain”, you can play it cool and say, “It cost me 8 Gwei – no biggie”.
This sort of fractional categorization of currency into independent units shouldn’t be a foreign concept as standard money uses the same format. You have your various dollar bills, then you have your quarters, your dimes, your nickels, and your pennies. They simply make a whole of a fraction, making trading and calculations easier.
But even though we now know what Gwei is in the context of Ethereum’s native currency, we still don’t know what that translates to in cold hard cash. This is where things get quite shocking. Are you ready?
A single Gwai is worth 0.00000405 U.S. dollars, but a single ETH equates to $4316.10. That’s right, folks. One ETH probably exceeds the value of your savings account of many years. That’s the figure you have to invest to stock your digital wallet, which leads me to my next point: whether the ETH exchange rate is set.
Much like any traditional exchange rate, the value of digital capital fluctuates based on supply and demand. In this sense, it behaves exactly like “real” money.
So, now that we’ve learned about the currency involved with minting NFTs on a Blockchain, let’s figure out what it equates to in American dollars. You may want to get your calculators out for this one, friends! The sum we’re doing is 0.00000405 x 8, which equals 0.0000324 dollars – not bad, right?
Do bear in mind, though, that 8 Gwei is just an estimated average NFT gas fee. It may be much higher or a little lower than this. If gas fees rise upwards of 12 Gwei ($0.0000486), In the past, Ethereum has suggested that the user waits until prices drop to mint their NFT; however, in the current climate, those figures are no longer relevant.
Any guesses on what it might cost you to mint NFT on the public Ethereum Blockchain at the minute? No? I’ll tell you. At this moment in time, prepping your product for the digital market will set you back something to the tune of $60-$100 – possibly even more. To put that into perspective, $100 equates to well over 24.5 thousand Gwei.
Wait, wait, wait – hold up. The average was 8 Gwei, and now it’s in the tens of thousands! What gives? Yes, it’s a pretty jaw-dropping jump, so let’s discuss how and why it happens.
What Causes Fluctuations in NFT Gas Fees?
NFT gas fees are currently at a premium for a couple of reasons. Firstly, with the latest high-profile, big-money NFT sales gaining traction in the media, NFTs are more popular than ever. The money-making potential of this new paradigm of digital commerce is being picked up and acted upon by artists and investors.
However, popularity and renown in itself isn’t the stimulus for rising gas fees, it’s much more physical than that, well…digital really. The cause of this gas fee explosion is down to clog, a term used to describe high network traffic.
Your transaction’s position on the next Block isn’t a given. Rather, you should think of each Block as a high-profile party. People are competing to get their name on the guest list, but the fewer tickets there are, the more they’re worth, and the more people are willing to pay for them.
It’s also important to note that clog isn’t only caused by NFTs. Blockchains are constantly processing a plethora of digital data and transactions as it’s a decentralized finance system for all things intangible.
What is Gas-Free Minting and Does it Exist?
One thing you should know is that you don’t have to mint your NFT on the public Blockchain where all the congestion occurs, costing you a fortune.
You may have even noticed that some sites such as OpenSea offer NFT minting yet advertise that it’s an entirely gas-free service, meaning that you can prepare your NFT for the digital marketplace for free, but is this too good to be true?
It’s not that these sites are straight-up lying as such, but calling their service gas-free minting is definitely playing it fast and loose with the truth. Their claims are correct in so much as you can indeed mint your NFT for nothing, zero Gwei, zilch.
However, the NFT this creates is not placed on the public Blockchain; it only exists on the site you used to mint it. You’ll be able to see it, it will look exactly the same as NFTs that are uploaded onto the public Blockchain, but it is an isolated product.
If you go to, say, upload your digital wallet to Rarible, and search for your NFT, it won’t be there, and that’s because Rarible – or any NFT auction site relying on the public Blockchain for that matter – simply isn’t aware of your freshly-minted NFT’s existence.
The limited exposure your NFT gets due to being locked in this localized space reduces your chances of making a sale, but doesn’t make your NFT completely inaccessible. Buyers will still be able to find it on the OpenSea site and purchase it – so far so good, right?
Well, this is where you’ll see exactly how the truth has been bent by these digital businesses. When someone buys or bids on your digital work, the site will then officially mint your NFT, thereby transferring it to the public Blockchain, and they will deduct a transaction fee from your profit.
This can really end up biting you in the digital bum, as you might not have figured this transaction fee into the pricing of your NFT. For instance, you may have priced your digital artwork at $50, but the transaction fee may be upwards of $60, meaning you’ve basically paid out to give your hard work away for free.
To avoid this heartbreaking scenario, make sure you read up on the small print of the operation. Find out if the transaction fee is a fixed percentage of the final sale, or if it’s modified by congestion. Each site that offers this service will have the details written in plain English somewhere on their site, so get digging!
I’d also like to just take a minute to establish that gas-free services are not all bad. They have plenty of redeeming qualities too. Sure, calling the service “gas-free” is misleading as they simply delay the charge, but there is merit to this delay.
If you’re just dipping your toes into the world of NFTs, this free-at-first approach can help you learn about the process and assess whether there’s a market for your work without spending a fortune.
Before we move on, I’d just like to draw your attention to one final thing to be wary of when using these gas-free services. Remember when I mentioned that NFTs only exist on the website you used to make them?
Well, websites aren’t exactly the most reliable digital data storage option, and there have been reports here and there of these localized NFTs vanishing. It’s not a huge deal, as you’re yet to part with any money, but it can be irritating all the same.
How to Keep Your Gas Fees to a Minimum?
If you do want to go ahead with the standard minting process – gas fees and all – you don’t necessarily have to settle for the requested price. There are ways to bring this figure down by at least a small amount, which helps take some of the sting out of the transaction.
- Choosing a Slower Transaction Rate – When you choose to mint an NFT, your chosen platform will most likely display a gas fee on the page, but this isn’t actually a fixed rate. This is a recommended rate based on the amount of traffic at this point in time.
You can then click on what’s normally an “Edit” prompt onscreen to bring up your other options. There will normally be three: “Fast”, “Average”, and “Slow”, the price of the transaction falling in unison with its speed. Choosing “Slow” may only take around $10 – $15 off the top, but that’s money saved nonetheless.
The great thing about this technique is that by “Slow”, it may only mean you have to wait 2 – 5 extra minutes for your NFT. NFTs aren’t particularly time-sensitive, so this slowdown doesn’t matter. The only reason the fast option exists is for financial transactions where prices can change drastically while the transaction is taking place.
- Customize Your Gas – A more advanced version of my first suggestion, you can actually come up with your own figure as a gas fee, but it’s not as simple as typing in $1. Customizing your gas fee is actually more of a gamble than a set thing.
If your figure is too low, there’s a chance the transaction will never actually reach completion. In this scenario, you will not be refunded, and you will have to start the process over again.
- Pick Your Moment – As we’ve already discussed, gas fees are based on network traffic, so naturally, you should find a relatively quiet period to mint your NFTs on the public Blockchain.
Generally speaking, it’s best to avoid using the network throughout the working week as it gets incredibly congested; however, during unsociable hours and the weekend, traffic decreases significantly, ensuring you get the best price possible.
You may be thinking that’s all well and good, but how are you supposed to keep tabs on network traffic status? It’s actually incredibly easy to do. There are sites out there that have charts that display traffic and gas fees in real-time over the course of each day and throughout the week. You can use these to pick the perfect time to strike.
I recommend combining this strategy with my first suggestion, to keep gas fees to an absolute minimum.
- Set Up Email Notifications – You can also use a different sort of gas fee tracking site to notify you at precisely the moment fees reach a desired figure. Say, for instance, that you were banking on paying 100 Gwei for the mint, you can log that figure into the site, leave your email address, and it will tell you when to start your transaction.
- Use Alternative Blockchains – While the Ethereum Blockchain is the most popular and successful model of its kind at the minute, it’s by no means the only one. Switching to a less popular Blockchain with less congestion is a great way to cut those gas fees down to size.
Having said that, it’s important to understand that secondary Blockchains aren’t as advanced as the Ethereum chain, and they may not have been adopted by as many auction platforms.