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How to reduce gas fees on Uniswap?
At the moment you pay a lot of gas fees on Uniswap.
The current gas fee climate for the Ethereum network is making me speechless. Over the past year, I’ve spent more money on transaction fees than on rent. It got to the point where I started looking at two different things:
- Which blockchains offer much cheaper transaction costs, but still offer good trading/investment opportunities.
- How can I significantly reduce my transaction costs on the Ethereum network, or is that not possible at all?
I found my answer to both questions. Those who actively follow me know that I have invested in Binance Smart Chain altcoins for the past few months. The Binance Smart Chain is Ethereum compatible and offers <$0.1 transaction fees for trades/swaps.
This means that it is incredibly interesting for projects to switch to the BSC as it offers different solutions while requiring minimal effort for developers to switch. The BSC overtook the Ethereum network in the number of transactions per day last week.
However, I am also aware that there are still many ERC-20 tokens out there that could soar in value. That’s why I started looking for options to reduce gas costs when using decentralized exchanges. The solution isn’t perfect, but it still cuts gas costs by about 20%.
How can I reduce my transaction fees when using Uniswap, 1INCH, etc.?
It’s funny, but ETH doesn’t meet its own ERC-20 standard. ETH was built before the ERC-20 standard existed, which causes some problems.
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 these transfers are tracked in the network.
Decentralized platforms use smart contracts to allow users to trade directly with each other. Without the intervention of an intermediary. wETH allows you to trade ETH directly for ERC-20 tokens, which is normally an extra step in the smart contract and thus increases transaction costs.
wETH is pegged at a 1:1 rate to ETH and can be traded on any decentralized exchange or on wETH.io. Transaction fees are still paid in ETH, so make sure you keep a little bit of ETH in your wallet too and don’t trade everything.
Here’s an example of how I’m trying to exchange UNI tokens to ETH, instead of converting UNI tokens to WETH:
