Gas fees are not only way too high for most NFTs right now but also very complicated to see through in the beginning. Making it even more frustrating when you waste tons of money on gas for transactions and token swaps. This guide will help you save money by teaching you about how gas fees work and when you need to pay them on OpenSea.
In general the amount of gas fees are highly dependent on the underlying blockchain, Ethereum for example had gas fees up in the hundreds in the past while Polygon is completely gas free. Because the gas fee differs so much, I want to focus more on when you have to pay for gas and provide you with some links to check the current gas prices for each network.
What are gas fees?
Expressed in a simple way gas fees are the price you pay to interact with the blockchain. The fees are then paid out to the people that keep the network running.
For ethereum and bitcoin for example the gas fee is paid to the miners that provide their computing power to mine new blocks and sign transactions on the blockchain.
For proof-of-stake blockchains like Cardano the fee is paid out to people that stake their crypto for rewards.
The amount of gas highly differs depending on the blockchain and the current supply and demand.
Right now OpenSea supports the following blockchains/ tokens:
Ethereum/ wETH
Polygon/ ETH
Ethereum/ DAI
Ethereum/ USDC
Klaytn/ wKLAY
The default token for paying gas fees on OpenSea is ETH for any transaction on the ethereum blockchain. This includes purchases with USDC, DAI or wETH. Transactions on the Polygon chain are gas free.
Why pay gas fees in ETH and buy NFTs with wETH?
On OpenSea most items are listed on Ethereum by default. However purchases are made with wrapped Ether (WETH) and not “standard” Ether (ETH). So why are auctions held in wETH instead of ETH ? OpenSea writes:
“Auctions are held in wETH because, unlike ETH, wETH can be instantly transferred using ERC20’s “transferFrom” function.”
In order to be able to transfer tokens throughout the Ethereum Network a token standard was needed. This standard, called ERC-20, allows users to easily trade with other tokens that comply with this standard.
Ether is a proto-token, meaning it was built before the ERC-20 standard existed. So while ETH is still used to pay for gas fees in the network, wETH is the standard currency on OpenSea to purchase NFTs. Other currencies that are supported include for example wKLAY, the wrapped token of Klaytn.
Luckily ETH and KLAY can easily be wrapped and unwrapped for an equal amount of wETH or wKLAY respectively. However, like many things, wrapping requires paying a gas fee.
When do I have to pay gas fees?
Now the most important question is when gas fees are due on OpenSea. In general I will focus on the ethereum blockchain as Polygon is gas free.
Using Polygon to pay no gas fees
Polygon is a protocol built on the ethereum chain that uses a sidechain solution to counter ethereum's problems with scalability and high transaction fees. This allows users to pay with ETH while taking advantage of no gas fees.
In order to buy an NFT on OpenSea listed on the Polygon chain you first need to bridge your ETH to the Polygon network. If this is a first time purchase you also need to unlock your wallet for Polygon trading, which means in total you have to pay gas fees twice.
If you already unlocked your wallet you just need to pay for the bridging.
If you are planning to buy multiple NFTs on Polygon, make sure to transfer all the necessary ETH in one transaction so you only pay for gas once. After that you can enjoy not paying for gas fees as long as you have bridged ETH in your wallet. Sadly there are much less NFT on Polygon compared to ETH but if you are on a budget, this is still a great option.
Gas fees on the ethereum chain
Sometimes it can be difficult to understand, when you have to pay for gas. Transactions on OpenSea that include gas fees are:
Accepting an offer
Transferring (or Gifting) an NFT to someone
Buying an NFT
Canceling a listed NFT
Canceling a Bid
Converting WETH back to ETH, and vice versa.
Freezing your metadata.
Bridging ETH to or from Polygon.
So how does this apply to you when buying NFTs? The answer is, it depends on the kind of purchase you do, and whether you have purchased on OpenSea before:
Fixed price listing
Buying items with a fixed price on OpenSea is the least complicated option when it comes to gas fees. Similar to dutch auctions (price falls until someone purchases), buying a fixed-price item costs a gas fee.
Auction Gas Fees
Auctions are the most complicated option for dealing with gas fees and can be especially tricky for beginners to deal with. So I broke down the steps you have to take in order to avoid losing money in unnecessary transactions.
1. Bidding
If you want to bid in an auction for the first time you will quickly notice that you need to pay a gas fee. Don’t panic yet though, this gas fee is not charged every time you bid on an item. It’s a one time fee to “unlock” the bidding process for your wallet, after which bids can be made with just a signature.
2. Cancel bidding
Cancelling a bid you made will cost a gas fee. Notice however that your wETH funds are not tied up in the auction and can be used to for example bid on other items. This means that it can sometimes be smarter to wait until you are outbid by someone else, to avoid paying the gas fee.
3. Accepting offers
If the seller of an NFT accepts your offer, the gas fees will be paid by the seller. If the auction ends above the price of 1 ETH, OpenSea will automatically complete the transaction and pay any gas fees in the process. If your offer is under 1 ETH however, the seller is under no obligation to accept it.
Selling an NFT on the secondary market
If you decide to resell an NFT on OpenSea you pay no gas fee for listing the item both as a fixed-price or an auction. You can also lower the listing price for no extra charge. However you will have to pay for canceling a listing, accepting an offer (under 1 ETH) and transferring the NFT to the new owner. As gas fees for ethereum can be really high at the moment, make sure to check sites like ETH Gas Station for current gas prices and to calculate if you will realistically make a profit.
If this is your first time listing on OpenSea you will have to pay two one-time fees:
Initializing your account for selling
Allowing OpenSea access to either a single NFT or multiple NFTs that are part of one collection (this might be required if the item(s) was not minted on OpenSea but through a custom contract)
If this is not your first time listing, you don’t have to pay any gas fees, as long as OpenSea has access to your item (meaning it was either minted on OpenSea or you already approved the collection before).
However this also means that you have to pay a gas fee for each NFT you want to sell that was not minted on OpenSea and is not part of the same collection.
Example
You own 2 CryptoPunks and 1 NFT that you (or the pre-owner) minted on OpenSea. If you would now try to resell these pieces you would have to pay a gas as follows:
Once for the 2 CryptoPunks that were minted through a custom contract and not on OpenSea. Because they are part of one collection though you can often approve them together. (This depends on the contract of the collection and is not always the case).
No gas fee for the NFT that was minted on OpenSea.
Failed transactions
Sometimes transactions on the blockchain can fail. Unfortunately gas fees have to be paid for the validation of the transaction, regardless of whether it was successful or not.
Here are two common errors that can occur and how to avoid them:
Dropped & replaced transactions are transactions that get overwritten by a new transaction from the same account. This can for example happen when a user sets a low gas fee for the first transaction and then creates a second transaction with a higher gas price (higher gas means the transaction gets through faster)
Out of gas is an error that occurs when the gas limit was set too low. Usually your wallet fills in the gas limit automatically. So most of the time you should not try to save gas by lowering the gas limit as your transaction can run out of gas before it gets fulfilled and you will have to resubmit it.
Conclusion
As you can see, gas prices can be a confusing thing to deal with. However, as long as you understand when you have to pay them and you try to avoid spikes in gas prices, you can save yourself from throwing money out of the window. A lot of gas fees are also just one-time fees that you fortunately don’t have to pay over and over again. With the introduction of ethereum 2.0 the gas prices will hopefully drop to almost nothing anyway.