#CryptoFees101

CryptoFees101 💸

Understanding fees in the crypto world can save you money and headaches. Here's a breakdown of the different types of fees, what causes them, and how to avoid overpaying.

⚙️ 1. Network (Gas) Fees

These are paid to the blockchain network to process and confirm your transactions.

Ethereum (ETH): Gas fees vary based on network congestion. Paid in ETH.

Bitcoin (BTC): Fees depend on transaction size (in bytes), not amount sent.

Solana, Polygon, Avalanche, etc.: Much lower fees, often just fractions of a cent.

💡 Tip: Use the network during off-peak times or Layer 2s (e.g., Arbitrum, Optimism) to save on fees.

💱 2. Exchange Fees

Charged by centralized exchanges (CEXs) and decentralized exchanges (DEXs).

Centralized Exchanges:

Maker vs. Taker Fees: Makers (limit orders) usually pay less than takers (market orders).

Withdrawal Fees: Often flat-rate and can be high (especially for BTC, ETH).

Decentralized Exchanges (DEXs):

Pay network fees plus protocol fees (e.g., 0.3% swap fee on Uniswap).

💡 Tip: Compare fees across platforms (e.g., Binance, Kraken, Coinbase). Avoid small withdrawals—batch them if possible.

🪙 3. Token Swap Fees

When you exchange one token for another (e.g., ETH → USDC), you pay:

A DEX fee (like 0.3% on Uniswap/SushiSwap).

Slippage, if the market moves before your trade executes.

💡 Tip: Set your slippage tolerance wisely; 0.5–1% is typical for liquid tokens.

🧠 4. Bridging Fees

Moving assets between blockchains (e.g., from Ethereum to Polygon) involves:

Network fees on both chains.

Protocol fees (depending on the bridge used).

💡 Tip: Use optimized bridges (e.g., Across, Hop) and monitor costs before bridging.

🪜 5. Layer 2 Fees

L2s like Arbitrum, Optimism, and zkSync reduce costs dramatically.

Small transaction fees, but withdrawing back to Ethereum can be expensive and delayed.

💡 Tip: Keep assets on L2 if you don’t need to go back to L1 right away.