What is the difference between gas price and gas limit?

Understanding Gas in Ethereum and EVM-Based Networks

In blockchain networks that support smart contracts—particularly Ethereum and other EVM (Ethereum Virtual Machine)-compatible chains—gas is the unit that measures the computational effort required to execute operations. Every action on the network, such as sending tokens, deploying a smart contract, or interacting with a decentralized application (dApp), consumes gas. The concept of gas ensures that users pay for the resources they use, preventing spam and maintaining network stability. However, two critical components govern how much users pay and how transactions are processed: gas price and gas limit. These are independent but interrelated values that must be set correctly to ensure successful and cost-effective transactions.

What Is Gas Price?

The gas price refers to the amount of cryptocurrency (usually denominated in gwei, a subunit of ETH) that a user is willing to pay per unit of gas. This value directly influences how quickly a transaction is confirmed by miners or validators. A higher gas price increases the incentive for block producers to include the transaction in the next block. The gas price is dynamic and fluctuates based on network congestion. Users can check current gas prices using tools like Etherscan Gas Tracker, GasNow, or Blocknative’s Gas Platform.

• Navigate to Etherscan.io
• Click on the 'Gas Tracker' tab
• Observe the current low, average, and high gas prices in gwei
• Use the average price for normal transactions or high for urgent ones

For example, if the current average gas price is 30 gwei and your transaction consumes 21,000 units of gas, the total fee will be 30 × 21,000 = 630,000 gwei, or 0.00063 ETH. Wallets like MetaMask automatically suggest gas prices based on network conditions, but advanced users can manually adjust them to save costs or speed up transactions.

What Is Gas Limit?

The gas limit is the maximum amount of gas a user is willing to consume for a transaction. It acts as a safety cap to prevent runaway code or infinite loops from draining a user’s funds. Each transaction type has a standard gas requirement. For instance, a simple ETH transfer requires a gas limit of 21,000 units. More complex operations, such as interacting with DeFi protocols or minting NFTs, may require 100,000 gas or more.

• Open MetaMask and initiate a transaction
• In the transaction details, locate the 'Gas Limit' field
• For ETH transfers, ensure it is set to 21,000
• For contract interactions, allow the wallet to estimate or manually input a higher value

If the actual gas used is less than the gas limit, the unused gas is refunded to the sender. However, if the gas limit is too low to complete the operation, the transaction will fail and the gas used will not be refunded, even though the state changes are reverted. This is known as an 'out of gas' error.

How Gas Price and Gas Limit Interact

The total transaction cost is calculated by multiplying the gas price by the gas used, not the gas limit. However, the gas limit sets the upper boundary for consumption. For example:

• Gas limit: 50,000
• Gas price: 25 gwei
• Gas used: 45,000

Total cost = 25 gwei × 45,000 = 1,125,000 gwei (0.001125 ETH)

Even though the limit was 50,000, only 45,000 was consumed. The remaining 5,000 gas is not charged. However, if the same transaction had a gas limit of 40,000, it would fail because 45,000 gas is needed, and the entire 40,000 would be consumed without success.

Wallets typically automatically estimate gas limits for standard transactions. For custom contract calls, users may need to:

• Use 'Estimate Gas' functions in dApps
• Check similar transactions on Block explorers
• Increase the suggested limit by 10–20% to avoid failure

Common Misconfigurations and How to Avoid Them

Misunderstanding gas price and gas limit can lead to failed transactions or excessive fees. A common mistake is setting a gas price too low during peak congestion, causing the transaction to remain unconfirmed for hours or even days. Conversely, setting a gas limit too high does not increase fees unless more gas is consumed, but setting it too low causes failure.

To avoid errors:

• Always verify the recommended gas price before sending
• Do not manually lower the gas limit below the required minimum
• Use custom nonce management if canceling or replacing a stuck transaction
• Monitor pending transactions via MetaMask Activity tab or Etherscan

For stuck transactions (low gas price), you can replace them by:

• Sending a new transaction with the same nonce
• Using a higher gas price
• Setting the value to 0 ETH if the original was a token transfer
• Confirming the replacement in your wallet

This process, known as 'speeding up' or 'canceling' a transaction, leverages Ethereum’s nonce system to overwrite pending transactions.

Gas Settings on Layer 2 and Alternative EVM Chains

On Layer 2 solutions like Arbitrum, Optimism, or zkSync, and sidechains like Polygon, gas mechanics differ slightly. While gas price and gas limit still exist, transaction fees are significantly lower due to reduced congestion and different consensus mechanisms. Gas prices on Polygon may be as low as 20–50 gwei, compared to Ethereum’s 30–100+ gwei during peak times.

When using these networks:

• Ensure your wallet is connected to the correct network RPC
• Adjust gas settings according to the chain’s average
• Use Chainlist.org to add network configurations safely
• Be aware that gas limits for contract interactions may differ from Ethereum

Some Layer 2 networks use dynamic fee models or fee abstraction, but the fundamental concepts of gas price and gas limit remain applicable.

Frequently Asked Questions

Can I change the gas price after sending a transaction?Yes, if the transaction is still pending. You can replace it by sending a new transaction with the same nonce and a higher gas price. Most wallets like MetaMask offer a 'Speed Up' option to do this automatically.

Why did my transaction fail even though I had enough ETH for the gas?The transaction likely ran out of gas because the gas limit was too low for the operation. Even with sufficient funds, if the computation exceeds the limit, execution halts and the gas is consumed.

Does a higher gas limit increase my transaction fee?No, you are only charged for the gas used, not the limit. However, setting an excessively high limit is unnecessary and could pose risks if interacting with malicious contracts.

What happens to unused gas in a transaction?Any unused gas is automatically refunded to your wallet in the form of ETH. For example, if you set a gas limit of 100,000 but only 70,000 is used, the remaining 30,000 is returned.