Gas Fee

A gas fee is what you pay to have a transfer or transaction processed on a blockchain. Unlike a fixed bank transfer charge, it is a priority payment made to the validators who do the processing.

Why does it exist? A blockchain can only process a limited number of transactions at a time, so when demand spikes there is not enough room. Transactions offering higher fees get processed first. It is effectively an auction, which is why fees can multiply during a popular token launch or a market crash.

The name comes from computational work. A simple transfer requires little computation and costs little gas, while executing a complex contract requires much more. The final fee is therefore how heavy the transaction is, measured in gas units, multiplied by how congested the network is right now, the gas price.

One practical warning: the fee has nothing to do with the amount you send, so sending a small sum can cost as much in fees as the transfer itself. Batching several small transfers into one is cheaper, and you can also pick quieter hours or use a lower-cost network. Note too that gas spent on a failed transaction is not refunded.