Gas fees are transaction fees you pay for making a transaction on the blockchain, to authorise a transaction and make it go through, you have to pay a gas fees. On thé DEX exchanges Gas fees are used to pay node validators and miners, on centralized exchanges I think transaction fees for trading goes to the exchange and it differs. On centralised exchanges these transaction fees during trading goes to the exchanges this is where they make their money from. That is why sometimes when you are choosing a centralized exchange to trade on, you have to check their trading fee. But I don’t know if they make profit from withdrawal fees, I feel they certainly do because it’s different from what Decentralized exchanges charge.
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When making transactions, like withdrawals, gas fees is always considered because you don’t want to spend over $2 sending $5 worth of asset. I was trying to send ETH today to mint an NFT, I needed $1 worth of ETH but the transfer fee was $1.7, doesn’t make sense to spend that much on gas fees. Well, the Ethereum blockchain is congested today so gas fees are high to reduce congestions, so I am going to wait. But then I needed to transfer my money from my OKX wallet to my Binance wallet, I had to brainstorm what coin will have the cheapest gas fees. I used to use XRP because it cost about 0.2 XRP to send XRP from one exchange to another, and with XRP price today, it is worth $0.072.
That’s very fair right? Solana is another cheap one, I found algorand, it’s very cheap too. But why are they cheap? Are they cheap because their values are still low? I remember 4 years when the value of ETH was very low due to the 2018/2019 bear market, I never considered Ethereum’s gas fees to be high because ETH value was very low, I think it was lower than $100, not until the bull market where I spent $20 to make a $30 transaction I realised how high the gas fees was.
As for Solana, I know that the gas fee is going to be very low no matter how much the value is because it cost about 0.000005 sol to make a transaction that is approximately $0.000085 with current price and $0.00122 with all time high price of $245. Now do you think other coins like algorand and XRP will still be cheap when they gain high price value. Imagine the price of XRP being $100 and it cost 0.2 XRP to transfer, will it still cost 0.2 XRP when the price gets to that value? Well, it’s going to depend on the exchange because, due to my experiences with DEX it cost far lower to make any transaction with DEX wallets. For instance, on XRP DEX wallet Xumm, thé transaction fee cost 0.000015XRP which is approximately $0.0000054.
