diff --git a/Gas_and_Fees_Judith.adoc b/Gas_and_Fees_Judith.adoc new file mode 100644 index 0000000..ee0f965 --- /dev/null +++ b/Gas_and_Fees_Judith.adoc @@ -0,0 +1,18 @@ +In Ethereum, gas is the fee paid to perform any transaction or operation on the network — like sending ETH, minting an NFT, or executing a smart contract. +It’s like “fuel” that powers the network. +Every action on Ethereum costs a certain amount of gas. +Gas is paid in ETH (or gwei, a smaller unit of ETH). +It goes to miners (or validators in Ethereum 2.0) as a reward for securing and processing the transaction. + +Before EIP-1559, users had to guess the right gas fee to get their transaction confirmed quickly — often leading to overpaying or long delays. +EIP-1559, introduced in August 2021, changed this and includes: +Base Fee: An automatic, algorithmic fee that adjusts based on network demand. Everyone pays this minimum. +Priority Fee (Tip): Users can add a small extra fee to get processed faster — this goes to the validator. +Fee Burning: The base fee is burned (i.e., permanently destroyed), reducing ETH supply over time. + +Slippage is the difference between the price you expect and the price you actually get during a swap or trade — especially common during volatile or busy times. +For example: +You want to swap 1 ETH for 100 DAI. But by the time your transaction goes through, you only get 98 DAI. +That 2 DAI difference = slippage. +If gas prices are low, your transaction might be delayed — and the market may shift before it’s processed (causing slippage). +In high-demand blocks, others might outbid you in gas fees, pushing your transaction to later blocks — again increasing slippage.