Topic: please help me understand the gas cost of sending erc20 tokens (Read 177 times)

When you want your transaction to be confirmed quickly then you need to set the right amount of gas fee or else your transaction will be stuck there until the network gets clear.So the fee depends on the network traffic not the blockchain itself so if you choose ethereum based token then it normally has huge traffic than others so you are the one who is to decide which project to invest or not.

I also feel it, i think the height gas fee to sending ethereum/tokens very expensive since a hype of Defi, many people hope eth 2.0 can solve this problem.

For a comparison, here's a list of network fees for a few other coins built on their own platform/blockchain.

ALGO
Network fee:
0.001 ALGO
0.0004 USD

ARK
Network fee:
0.1 ARK
0.0366 USD

KMD
Network fee:
0.00000968 KMD
0.0000 USD

XVG
Network fee:
0.1 XVG
0.0013 USD

ADA
Network fee:
0.3685 ADA
0.1085 USD

XEM
Network fee:
0.15 XEM
0.0320 USD

XTZ
Network fee:
0.0055 XTZ
0.0127 USD

ATOM
Network fee:
0.0025 ATOM
0.0144 USD

ZIL
Network fee:
0.0021 ZIL
0.0001 USD

WAVES
Network fee:
0.001 WAVES
0.0064 USD

ONT
Network fee:
0.0875 ONG
0.0191 USD

ICX
Network fee:
0.3 ICX
0.1742 USD

QTUM
Network fee:
0.00035288 QTUM
0.0010 USD

LSK
Network fee:
0.1 LSK
0.1230 USD

There are only 3 in the list above that cost 10 cents or more per transaction.  Why would any developer choose to build on ethereum when the tokens they issue are literally worthless?  No one can afford to send or exchange them so once they're issued they just sit in the wallet indefinitely.


I completely disagree.  It is a problem.  If a token is to be a store of value and exchanged for goods or services then it must be inexpensive to send the token.  ERC20 tokens are generally issued to be used for a company's services.  Maybe it's cloud computing, file storage, DeFi, whatever.  It has to be inexpensive to send those tokens otherwise no one is going to use that company's services.  If the token is unused then the services are unused.

I understand there is processing power and electricity involved in verifying transactions on the blockchain.  And I don't complain when VISA or paypal charges a small fee to process a transaction.  But the transaction/network fee has to be so insignificant that it doesn't impede the buyer/sender from completing the transaction.

I should also mention that it's typically the seller/receiver of the funds that pays the transaction fee, not the buyer/sender.  Imagine shopping online or even in a retail store and you were expected to pay $17 in order to charge your VISA card for a $50 purchase.  No one would agree to that.

Every time you visit a web page you're using bandwidth, file storage and processing power from a server.  Would it make sense to charge a fee every time you load a new page in your browser?  We all pay a monthly fee to our ISP and we expect everything (not behind a paywall) to be free.  Perhaps that is the solution to the network/transaction fees.  Pay a monthly crypto fee to use a specific blockchain and all transactions are free (unlimited bandwidth, processing, etc).  Or they could just lower the cost per transaction to a few cents.

If you are having any tokens in your wallet that the value is less than 100$ it doesn't make any sense to send them to exchange at 10$ to 17$, this is what is happening with Ethereum network right now, you will even lose more if you tend to withdraw in Ethereum from the exchange, now all fingers are crossed, maybe the altcoin season won't even make any sense if all you hold is tokens? Waiting to find out

I am one of those who cannot sell because of the high cost of gas, imagine sending $40 worth of tokens on a $12 gas fee over 20% of the cost of the token you are selling, only whales can sell their token because they are sending big amount but how about small traders and sellers, they are losing on this bargain.

ETH/ERC20 - Check and select good Gas price
[GUIDE] How to cancel or replace an ETH transaction (Metamask, MEW, MyCrypto)
GAS NOW - New Price Gas Forecast Service
[GAS Price Aggregator] How to find the optimal gas price

You need to do checks on a few sites as sometimes, a website can have technical problems and give you inaccurate information on Gas price. Now, the gas price on Ethereum network is very high, at 261 Gwei for an average speed transaction: https://ethgasstation.info/calculatorTxV.php

Well, in simple terms:

Ethereum is a World computer. Wasting processing power of a world computer in worhtless transactions is the same as wasting world resources.

So, to prevent attacks and to prevent waste of resources you have to pay for each transaction, and you pay for transactions with GAS.

GAS is the same as ETH (Ether, the native ethereum currency). So, to transfer any token inside Ethereum blockchain you need to use Eth.


I explained here in this topic how to use gas and how it is calculated.





Of course there is no way around. You basically want free eletricity and free processing power. There is no free launch.

And no, eth 2.0 will not "solve" this, because your "problem" is not a problem, but a solution to the waste of resources.

However, with ETH 2.0 fees might become cheaper (although that is not guarantee)



Well, Ethereum is a risky investment. you are correct. ERC-20 are like kamikase investments, you have like 99% of losing all of it. Do you know more than 90% of ERC-20 tokens just fail and lose 98% value after a few months, right?

if Eth2.0 still have high fees (Eth now has higher fees than btc) it will be a problem.

i can't say too much about ethereum 2.0 as it's not yet implemented and you should not take the prediction about how much TPS can be achieved after the implementation of the sharding system.
You should aware that if when the chain was getting congestion and there will be a lot of txs stuck to be verified by the block. The block itself will be verifying the tx with higher fees as the priority transaction.
That's why people are putting more and more fees to make their tx to be delivered instantly or in a short time.
Another coin has been fixing the scalability problem and that's why can have less fees in tx.

Let me start by saying that I avoid investing in ERC20 tokens like the plague.  Sending/swapping generally costs more than the total value of the tokens that I'm sending/swapping.  I don't know why any project would choose to run their app/token on ethereum when considering the cost of gas.  For a comparison, scroll through the list of coins supported by Atomic Wallet and click send on a few of them.  You don't need any coins in your wallet to do this.  You'll discover that nearly every other coin costs a fraction of a cent ($0.01) to send.  But click on any ERC20 token in that wallet and you'll see a gas cost between $10-$17 (e.g., coti or lrc).

I have a bunch of ERC20 tokens in a wallet that I don't use and would love to close and forget.  It only contains those tokens.  But the tokens aren't supported on any exchange that I use which only leaves uniswap.  In order to convert the tokens to a different ERC20 token that is supported on my preferred exchange it will cost me $17 in ETH.  Then I'll have to pay another $17 in ETH to send them to my exchange account.  I don't own any ETH so I'll have to purchase $34 worth plus CC fees.  Let's say a total of $37.  The total value of my tokens is only $50 but I'm expected to pay $37 to swap and then send them to a different account.  The math doesn't add up.  I'd probably pay $1 to swap those tokens but not $37.  So for now I have to leave them where they are and probably never use them again because the gas cost is so high.

Why does it cost so much more to send ERC20 tokens than other coins and tokens?  Is there any way around the problem I described above?  Will ETH 2.0 solve this and what do you expect the gas cost to be on the new 2.0 platform?

EDIT
I wanted to add that I suspect the value of a large percentage of tokens is based largely on the fact that no one can afford to send/exchange/sell them.  So in financial terms what does that mean?  If no one's selling, the price remains stable.  The second that the gas cost declines significantly, the more people will be selling those tokens that they've been holding.  If ETH 2.0 does in fact reduce gas cost to a few cents per transaction expect the value of tokens to plummet.  My 2 cents...