What are network fees and how do they work?
Summary: Network fees, also known as gas fees, are an important part of interacting with blockchain networks. In this article, we explain what gas fees are, why they change, and how you can manage them when using Web3 applications.
Introduction
To send crypto, your transaction must be verified and added to the blockchain by a global network of computers. This process requires significant computing power and energy. You pay a gas fee to compensate these providers for their work and to prioritize your transaction in the digital queue.
Gas sponsorship for your first transactions
To help you get started with the Bitvavo Web3 wallet, Bitvavo sponsors the first 5 euros of your network fees.
- Free first transfers: Bitvavo covers the gas fees for your first transactions on the blockchain. This means you do not immediately need native tokens (like ETH or SOL) in your wallet to send crypto.
- Automatic application: There is no action required on your part. In your wallet, you will simply see the "Sponsored" label in the transaction confirmation screen when a fee is sponsored by Bitvavo.
- Sponsor limit: This sponsorship has a limit of 5 euros. Once this limit is reached, you will pay the network fees yourself.
Why do fees change?
Gas fees are not fixed and can change at any time. The main factor influencing fees is how busy the network is. When many users are interacting with the network at the same time, fees increase. This is because transactions compete to be processed. When the network is less busy, fees are usually lower.
How can you avoid high fees?
Network fees are a standard part of using blockchain networks, but there are ways to manage them:
- Choose the right moment: Fees are often lower when the network is less busy.
- Review the transaction: Before confirming, you can check the estimated fee and decide whether to continue.
FAQ
How do I know if my transaction is sponsored by Bitvavo?
Before you confirm a transaction in your Web3 wallet, the summary screen will clearly state whether the fee is "Sponsored" by Bitvavo or if a network fee applies.
Why is my transaction no longer sponsored?
If you no longer see the "Sponsored" label, it means you have reached the limit for Bitvavo sponsored transaction fees. From that point on, you will need to pay the transaction fees yourself to the network.
Why are the gas fees higher than usual?
Gas fees increase when the network is busy. When many users submit transactions at the same time, they compete to be processed, which drives fees up.
Who receives the gas fees I pay?
Gas fees are paid to the participants who process and secure the blockchain network. They are not received by Bitvavo.
Can I speed up my transaction by paying higher fees?
No, transactions are submitted with a set fee and cannot be manually adjusted.
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