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Gas Fees

In short

Transaction costs on blockchain networks — high fees indicate network congestion

Gas fees are what you pay to make transactions on Ethereum. When the network is busy (everyone trading), fees surge. High fees price out small users and signal heavy network activity — often during bull markets.

Gas fees compensate validators for processing transactions. On Ethereum, measured in Gwei. Fees fluctuate with network demand. High, persistent gas fees reduce DeFi profitability and signal bull market congestion. Layer 2 solutions (Arbitrum, Optimism) were created to reduce fee burden.

Related concepts

  • DeFi (Decentralized Finance) — DeFi is like a bank that runs on code with no employees. You can borrow, lend, trade, and earn interest — all automatically through smart contracts. No bank account needed, no identity verification, just a crypto wallet.
  • On-Chain Metrics — Unlike stocks, crypto blockchains are public. You can see exactly how many coins are moving, who holds what, and how network activity is changing. When on-chain activity rises before price, it can signal upcoming moves.
  • Liquidity Pool — A liquidity pool is a pot of two tokens that lets traders swap between them automatically. You provide the tokens and earn a share of trading fees. Risk: 'impermanent loss' if the prices of the two tokens diverge significantly.