Understanding Gwei: The Unit Behind BNB Chain's Low Gas Fees

Terrill Dicki Jun 29, 2024 05:48

Discover what Gwei is and how it measures gas fees on the BNB Chain, ensuring affordable transactions and efficient blockchain operations.

Gwei is a crucial unit for measuring gas fees on smart contract platforms, providing precise and standardized fee calculations. According to BNB Chain Blog, the BNB Chain’s low gas fees make it highly affordable for users and developers alike.

Gwei, short for “gigawei,” represents a billion wei, the smallest fraction of gas fees named after cryptography pioneer Wei Dai. Gas is essential in smart contract platforms as it compensates validators for the computational resources they expend during transactions or contract executions. This fee system rewards validators who maintain and secure the blockchain, supplementing their block rewards.

How Does Gas Work?

On the BNB Smart Chain (BSC), an EVM-compatible blockchain, gas operates within the Ethereum Virtual Machine (EVM). Whenever a transaction or smart contract is initiated, the EVM loads with the transaction data and a specified amount of gas. As operations are performed, the gas amount decreases. If the gas depletes before the transaction completes, the transaction halts and is considered invalid, though fees are still paid for the computational efforts up to that point.

Gas fees fluctuate based on network congestion, rising with high demand and falling with low traffic. Additionally, smart contracts may call other contracts, each loading a new EVM instance with inherited data. If gas runs out during these operations, the state reverts to before the transaction attempt.

Gas Limit vs Gas Price vs Gas Fees

Understanding the difference between gas limit, gas price, and gas fees is crucial:

• Gas Limit: The maximum amount of computational effort allocated for a transaction.
• Gas Price: The fee per unit of computational effort paid to prioritize a transaction.
• Gas Fee: The total cost paid for executing a transaction, determined by the gas used and the gas price.

What is Gwei? Why Do We Use it?

Using Gwei offers several advantages:

• Precision: Gwei provides a more precise way to calculate and represent small transaction fees.
• Simplicity: It simplifies the understanding and communication of gas prices among users and developers.
• Standardization: Gwei has become the standard unit for expressing gas fees, making it a familiar and convenient measure within the crypto community.

Other Denominations

Aside from Gwei, other denominations are used in the Ethereum ecosystem, each named after influential figures in cryptography and computing:

Gas In BNB Chain

BNB Chain’s L1 (BSC) and L2 (opBNB) platforms are known for their affordability due to low gas fees.

BSC Gas

BSC boasts the lowest gas price among L1s, with fees less than $0.03. The average gas fee is around 3 Gwei. BSC has increased its gas limit to 140M Gwei, providing 4.6 times the gas carrying capacity of Ethereum.

opBNB Gas

Gas fees on opBNB are almost negligible. Previously set at $0.001, they have been reduced nearly tenfold to $0.0001. The block carrying capacity will double from 100 million gas per block to 200 million gas per block, enhancing affordability and efficiency.

opBNB supports account abstraction (AA), allowing applications to significantly reduce gas costs associated with complex operations and smart contract interactions. This feature is particularly beneficial for applications requiring a large number of microtransactions, such as gaming and high-frequency trading (HFT) DeFi apps.

Conclusion

Gas fees are essential for compensating validators on smart contract platforms. Gwei, a precise and standardized unit, is used to measure these fees. Both BSC and opBNB are designed to be affordable, charging minimal gas fees that benefit both developers and users.

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• gwei
• bnb chain
• gas fees
• blockchain