The current gas climate for the Ethereum Network has left me speechless. Over the course of the past year, I spent more money on transaction fees than rent. It has gotten to the point where I started to look into a solution:
- How can I significantly reduce my transaction fees on the Ethereum Network, if at all.
How can I reduce my gas fees when using Uniswap, 1INCH, etc.?
It’s funny, but ETH doesn’t conform to its own ERC-20 standard. ETH was built before the ERC-20 standard existed which causes some issues.
wETH is a ‘wrapped’ version of ETH and is built on the Ethereum Network, using the ERC-20 standard. The ERC-20 standard defines how tokens are transferred and how a record of these transfers is kept in the network.
Decentralized platforms use smart contracts to enable users to trade directly between each other. Without relying on any middleman. wETH enables you to directly trade ETH for ERC-20 tokens, which reduces one step in the smart contract and therefore the transaction fees.
wETH is pegged at a 1:1 rate to ETH and can be swapped on any decentralized exchange or on wETH.io (http://weth.io/). Transaction fees would still be paid in ETH, so make sure you also keep a little bit of ETH in your wallet and don’t swap everything.
Here is an example of me trying to swap UNI tokens to ETH, versus swapping UNI tokens to wETH:
The results: Save 14.1% in fees simply by using wETH!
This might not seem like ‘much’ initially. However, considering many traders spend thousands of dollars / year on transaction fees, this adds up a lot!