Gas fees are one of the most discussed—and often most misunderstood—elements of blockchain transactions. Whether you're swapping tokens, minting NFTs, or simply transferring crypto from one wallet to another, each action requires a fee on a blockchain. Yet, users frequently ask: Why do gas fees differ so much across networks? And more importantly, how should you record these fees for proper tracking and accurate calculation of expenses or profits?
In this article, you will learn why gas fees vary from blockchain to blockchain, what factors shape these differences, and how to systematically record gas fees to maintain transparency in your transactions.
What Are Gas Fees?
Fees are small payments you make to the blockchain network for processing your transaction. These fees are paid to validators or miners who secure the network and ensure your transaction is included in a block.
To simplify:
A blockchain is like a global computer.
Each time you perform a command on it, like transfer, swap, or mint, you use its computing power.
Gas fees pay for that computing power.
Why gas exists:
This is to prevent spam on the network.
To incentivize network participants
To prioritize transactions
To keep resource usage equitable.
While all blockchains have some fee, the amount and how it's charged differ, that's what confuses most users.
Why Gas Fees Differ Across Blockchains
Main reasons are explained in detail below with clear examples.
1. The Blockchain’s Design and Consensus Mechanism
Architecture and the consensus mechanism are major reasons gas fees fluctuate in a blockchain.
Common consensus mechanisms:
Proof of Work: Bitcoin, older Ethereum version
Proof of Stake (PoS): Ethereum, Solana, Polygon
Delegated PoS: EOS, Tron
Rollups (Layer 2): Arbitrum, Optimism
DAG: Nano, IOTA
Each of the mechanisms performs transaction validation differently, hence having different costs.
Why this affects fees:
PoW networks use large computational power that results in higher fees.
Staking in PoS-based networks is less resource-intensive; therefore, the fees are much lower.
Layer-2 networks batch many transactions into one → significantly lower fees.
Example:
Sending ETH on Ethereum L1 can cost $5-$20.
Sending MATIC on Polygon usually costs less than $0.01.
This difference is real because the networks operate differently from a technical standpoint.
2. Network Congestion and Block Space Demand
Think of block space as seats on a bus. If too many people want to board and the seats are limited, the price of the ticket goes up.
Similarly:
High demand = high gas
Low demand = low gas
Reasons for Congestion:
NFT mints
Airdrop farming
Market volatility surges
Popular apps driving traffic
Example:
The high competition to get included in the next block by users during popular NFT mints on Ethereum drives gas prices up for a while.
Smaller or faster networks, like Solana or Avalanche, might not face the same pressure at the same time, thus having cheaper transactions.
3. Transaction Complexity: Simple versus Complex Actions
Not every transaction requires the same amount of computational work.
Simple Transactions:
Sending tokens between wallets
Approval of contract
Complex transactions:
Multi-token swaps
Yield farming interactions
NFT minting
Bridging assets
The more computational steps involved, the more gas is required.
Example:
Sending ETH: low fee
NFT minting: costly, since more operations should be made in its smart contract
This explains why you see large variations even on the same blockchain.
4. The Price of the Network’s Native Token
Usually, gas fees are paid in the blockchain’s native token.
Examples:
Ethereum → ETH
Binance Smart Chain → BNB
Solana → SOL
Even though the quantity of gas in units does not change, the dollar cost in reality changes when token prices move.
Example:
If a transaction uses 0.002 ETH:
ETH at $1,000 → cost $2
ETH at $3,000 → cost $6
This alone can create large variances in user experience.
Comparison Table: Why Fees Differ
Blockchain | Consensus | Typical Fees | Why It’s Priced This Way |
Ethereum (L1) | PoS | Medium–High | High demand complex apps limited block space |
Polygon | PoS | Very Low | Sidechain design reduces load; cheaper computation |
Solana | PoS + PoH | Extremely Low | High throughput allows thousands of low-cost transactions |
Arbitrum/Optimism | Rollups | Low | Bundles transactions and posts them to Ethereum |
Avalanche | PoS | Low | High scalability and fast finality reduce gas pressure |
How to Record Gas Fees Properly
Proper record-keeping helps with:
Tracking true costs
Managing portfolios
Tax compliance (in many countries)
Understanding your net returns
Calculating exact trade outcomes
Many users overlook this and later struggle to tally expenses or compute crypto gains accurately.
This is why gas fee recording is as important as tracking your token balances.
Why Recording Gas Fees Matters
Gas fees impact:
Your cost basis
Your net profit or loss
Your portfolio performance
Your cash flow
Your accounting or tax filings
If you don’t record gas fees:
You may think a trade was profitable when it wasn’t
You may lose track of how much you spent
You may miscalculate long-term value
Gas fees, especially on networks like Ethereum, can add up quickly. Recording them ensures full transparency.
What to Record for Each Transaction
A complete gas fee record should include:
Date and time
Blockchain used
Your wallet address
Receiver (if applicable)
Transaction hash
Gas units used
Gas price per unit
Total gas cost (token + fiat equivalent)
Reason for transaction (swap, mint, transfer)
Collecting this ensures that every transaction is traceable and auditable.
How to Record Gas Fees
Method 1: Use Crypto Accounting Tools (Automatic Recording)
Best for users with large transaction volumes.
Tools like:
Koinly
CoinTracker
Accointing
TokenTax
Steps:
1. Connect your wallet or exchange through API or address.
2. Let the tool import all your transactions.
3. The tool assigns values to gas fees automatically.
4. Review and correct categorization.
5. Export reports as needed.
Pros:
Saves time
Auto-fetches data
Good for tax and accounting
Cons:
Not always 100% accurate
Some tools are paid
Method 2: Use a Spreadsheet (Manual Recording)
Best for users who want full control and transparency.
Step-by-Step:
1. Create columns for the items listed above.
2. Copy-paste the transaction hash from the blockchain explorer.
3. Record gas used and gas price.
4. Convert gas fees to USD/INR at the time of the transaction.
5. Add a note describing the action.
6. Save the sheet regularly.
Why this works:
Flexible
Transparent
You understand every detail
Method 3: Use Wallet Features (Semi-Automatic)
Some wallets show historical gas usage.
Examples:
MetaMask
Phantom
Rabby Wallet
How it helps:
Quick review of monthly spending
No need to manually calculate gas
Helps determine which network is cost-efficient
Wallet logs aren’t enough for full accounting, but they’re helpful for quick checks.
How Gas Fees Affect Your Portfolio
Gas fees reduce your effective returns. Even if the trade seems profitable, gas can eat into your margins. This is especially true for small trades or during high congestion.
Examples:
A token swap costing $20 in gas
Transferring NFTs that require multiple contract calls
Bridging assets between chains
Frequent trading without considering gas fees often leads to lower net returns.
Conclusion
Gas fees differ across blockchains because each network has unique architecture, consensus mechanisms, token economics, and levels of congestion. Understanding these differences helps you choose the right blockchain for your needs and avoid unnecessary expenses.
Equally important is recording gas fees accurately, whether through accounting tools, spreadsheets, or wallet history. Proper tracking ensures clarity, supports better portfolio decisions, and helps calculate true crypto gains or losses.
As blockchain ecosystems grow, users who understand how gas fees work—and how to manage them—will have a significant advantage in navigating the crypto landscape efficiently and cost-effectively.
FAQs (Based on Google “People Also Ask”)
1. Why are Ethereum gas fees so high?
Ethereum has high demand, high usage, and limited block space. Complex apps and smart contracts also require more computation, increasing fees.
2. Which blockchain has the lowest gas fees?
Solana, Polygon, and some Layer-2 networks like Optimism and Arbitrum typically offer very low fees.
3. How do I avoid high gas fees?
Use Layer-2 networks
Avoid peak times
Use gas trackers
Switch to cheaper chains for routine transactions
4. Are gas fees tax-deductible?
In many countries, gas fees related to trading or transferring can be added to your cost basis. Check your local tax laws.
5. Do gas fees affect crypto gains?
Yes. Gas fees reduce your net profits by increasing the cost of each trade or action. Recording them accurately helps calculate true gains or losses.
