If anyone survived the recent Stoner Cats and Vogu drops, then congratulations on receiving your medal of honor from The NFT Gas Wars!
For the rest of us who weren’t so fortune, users left literally millions behind in total fees. For anyone that is new to the NFT space, gas wars are a weekly occurrence. What are gas wars you may ask? Let’s take a deep dive into what they are and ways to come out on the winning side.
To understand gas wars, we must first understand the Ethereum network as well as gwei. The Ethereum blockchain is a decentralized network comprised of a public ledger. This means anyone can verify any transaction on the network, making the entire process trustless. Users can dedicate their computing power to help the Ethereum network. This is done for two reasons: To help decentralize the network, and to earn Ethereum for verifying transactions. Users that preform these tasks are called Miners. Miners usually join a “mining pool” in which they source their computing hardware to solve a block to be rewarded Ether. It’s extremely difficult to solve a block by yourself. With a mining pool’s combined resources, all users are rewarded Ether based off their processing power contributed to the pool.
Now let’s take a look at gwei. Gwei is small denomination of Ether. Ether is the currency that drives the network. Any and everything we do on the Ethereum network will require a small amount of Ether (gwei) to process transactions on the network. If the network is congested, then it will take more gwei to process these transactions (not to mention all the bots competing as well). Hence is where the “gas wars” come in for major NFT drops.
There are a host of websites to check the current gas prices for transactions. https://www.gasnow.org/, https://ethgasstation.info/, https://ethgas.watch/ are some sites to check out for the current gas price. Users can bid to have their transaction process first by bidding more than the current rates, but they will have a larger fee to pay. For users that don’t mind waiting, your Metamask will usually give you 3 options: slow, normal, and fast. Each will have a different fee depending on the status of the network. For the degen user, if you were to select the advanced tab and hit the edit button, there you can set the gas fee (in gwei) that you are willing to pay to process the transaction. Users can check one of the listed sites above to determine where they need to set their gas.
There are pros and cons to the gas wars. If a user sets the gas high enough and is willing to pay the extra fees (that can be extremely expensive at times) then they will have a high chance of their transaction processing. In the case other users outbid you on gas fees, more than likely your transaction will fail, and you will be stuck with the gas fees. Users can cancel a transaction in some cases to save on paying a massive fee.
The week’s drops of Vogu’s and Stoner Cats were two highly anticipated projects. Stoner Cats released a day after they announced due to issues on launch day. Once the team announced the project’s launch, gas fees shot to the moon. The average gwei price was well of 1000 (couple of hundred USD in fees). The users that were willing to pay these extremely high gas fees were rewarded with their Stonercat. Others who weren’t so lucky lost thousands to gas fees. There were frustrations from the community because they felt like the developers botched the gas limit while writing the smart contract for the drop. After the dust cleared there was over 400 Eth lost to transaction fees. A bad day for users trying to mint these NFTs and a great day for miners soaking in the fees.
The Vogu project also caused a gas war. On the 1st day of launch, the devs had to stop the smart contract manually because users that where savvy enough to mint from the smart contract directly had an advantage over users using the UI. The website for minting was experiencing problems at the time of mint. The manual stop caused many users that had transactions processing to be canceled losing them money in gas fees. The 2nd day the rest of the 7,777 were minted with gas peaking over 1000 gwei.
For the extremely proficient Ethereum users, Flashbots are the only way around these gas fees. This is a really complex process and escapes the scope of this article but users can read up here to learn more: https://www.paradigm.xyz/2020/08/ethereum-is-a-dark-forest/.