Transacting outside of US stock exchange opening hours can save you quite a bit on Ethereum transactions.
Anyone who has used Ethereum in 2020 knows the difficulties with gas fees. These are the fees you pay for a transaction. If the gas fees sometimes rise to 100 to 200 gwei (one gwei corresponds to one billionth of ether ( ETH )) that is too much for many users.
Only a comprehensive introduction of second- tier scaling solutions and so-called sharding could really solve this situation. But with a few tricks you can save some money when using this blockchain.
The simplest trick is to avoid transactions at certain times of the day. According to new research by Flipside Crypto, the Ethereum blockchain shows very specific patterns in terms of congestion that a savvy user can exploit to pay less gas fees.
Average Ethereum fees per hour, source: Flipside Crypto
The analysts examined the average fees on Ethereum as of January 1, 2020. The bars represent an average where most of the data points are located. The points, however, represent outliers.
The diagram shows that the Ethereum blockchain is busiest on average from 1:00 p.m. UTC to around 6:00 p.m. UTC. In Germany this corresponds to the time between 2:00 p.m. and 7:00 p.m. This is probably not a coincidence, as Europe and the US are fully awake and at work during this time window.
In contrast, the least busy time is between 9:00 PM UTC and 11:00 PM UTC. That also makes sense, because the working day in the USA is drawing to a close, Europe is about to go to sleep and in Asia it is still very early in the morning. In addition to the lower average values, there are also fewer outliers in the evening after UTC.
This information is useful in making the perfect time for a lower-fee transaction
You can be sure that it will be confirmed in a few hours. This trick is only useful for low priority transactions like token transfers. We rather advise against this for certain DeFi protocols.
Most importantly, decentralized exchanges are usually a poor destination for low priority transactions. The settings for the slippage protection can lead to the fact that the rate has already changed at the time of the transaction confirmation and the transaction fails. That is a waste of gas charges. Some DeFi protocols also have internal checks that reject transactions that are more than a few minutes old.
Aside from waiting, there are some situational tricks that can be used that will reduce gas charges significantly. The Chi Gas Token, for example, lowers the total gas consumption of a specific transaction. The token acts as a discount mechanism. If users mint chi when gas charges are low, they can use it when charges go up. Chi can also be bought like any other token.
Depending on the needs of the user, certain solutions can help to completely avoid high gas charges. Several second-tier solutions such as Zk Sync, Plasma from OMG or xDai relocate transactions to another ledger, which enables virtually free token transfers after the initial set-up costs. For trading, Loopring and DeversiFi offer custody- free trading with practically no gas fees.
Such alternative platforms are less used and may not be suitable for everyone, but they are also the only realistic way to reduce congestion once and for all.