When interacting with cryptocurrencies—whether sending funds to a friend, using decentralized finance (DeFi) platforms, or playing blockchain-based games—you’ll inevitably encounter network fees, commonly referred to as gas fees. These fees are essential for processing and validating transactions on the blockchain. Unlike service charges collected by wallet providers, network fees go directly to blockchain validators or miners who secure and maintain the network.
Understanding how these fees work across different blockchains—especially Ethereum and its Layer 2 (L2) extensions—is crucial for efficient and safe crypto usage. This guide breaks down everything you need to know about Ethereum gas fees, ERC-20 tokens, Layer 2 networks, and how to ensure you always have the correct tokens to cover transaction costs.
What Are Network and Gas Fees?
A network fee (or gas fee) is a small amount of cryptocurrency paid to process any transaction on a blockchain. It compensates validators or miners for the computational resources required to confirm your transaction.
These fees are not collected by wallet providers like Zengo—they are distributed within the blockchain ecosystem. The cost fluctuates based on network congestion: during peak usage, such as major NFT mints or DeFi launches, fees rise due to higher demand for block space. Conversely, when activity slows, fees typically drop.
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Understanding Ethereum and ERC-20 Transactions
Many popular digital assets—including stablecoins like USDC and USDT, utility tokens like Chainlink (LINK), and even memecoins like Shiba Inu (SHIB)—are built using the ERC-20 standard on the Ethereum blockchain.
While these tokens operate on Ethereum, they’re not limited to the main Ethereum chain (known as Layer 1). Thanks to scalability solutions, many now also exist on Ethereum Layer 2 (L2) networks such as Arbitrum One, Optimism, and Base. These L2s reduce congestion and lower transaction costs by processing transactions off the main chain and later settling them on Ethereum.
Key Rule: Pay Fees in the Network’s Native Token
To perform any transaction involving ERC-20 tokens, you must pay the network fee in the native cryptocurrency of the blockchain where the action takes place.
For example:
- Sending USDT on Arbitrum One? You’ll need ETH on Arbitrum One (not ETH on Ethereum L1).
- Interacting with a dApp on Polygon (MATIC)? You’ll need MATIC tokens.
- Swapping tokens on Base? You’ll need ETH on Base.
This distinction is critical. Using the wrong network or lacking sufficient native tokens can result in failed transactions—or worse, permanent loss of funds.
Always verify which network your assets are on and ensure you have enough of the corresponding native token to cover gas fees before initiating any transfer.
How to Get Network Fee Tokens in Your Wallet
To keep your crypto activities running smoothly, you’ll need a reliable way to acquire native tokens for gas. Here are three simple methods:
1. Buy Directly Through Your Wallet
Many wallets, including Zengo, integrate third-party services like Transak to let you purchase crypto instantly. You can buy ETH, MATIC, or other required tokens directly from your mobile app—often starting from just $5.
2. Swap Existing Crypto
If you already hold another cryptocurrency (like Bitcoin), use your wallet’s built-in swap feature to exchange it for the native token you need. For instance, swap BTC for ETH if you plan to transact on Ethereum or an L2 network.
3. Receive From Another Wallet or Exchange
Transfer the required token from an exchange or another wallet. Just ensure you’re sending it to the correct network address—sending ETH from an exchange? Double-check whether it supports withdrawals to L2s like Arbitrum or Optimism.
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How Much Gas Do You Actually Need?
Most modern wallets display the estimated network fee before you confirm a transaction. In Zengo, for example, the fee appears on the summary screen right after entering the recipient's address and before final approval.
If you're unsure about current rates:
- Use a trusted gas tracker like Etherscan’s Gas Tracker for Ethereum.
- For standard ERC-20 transfers (e.g., sending USDT or USDC), a gas limit of 21,000 to 45,000 units is typically sufficient.
Keep in mind that complex interactions—such as providing liquidity or minting NFTs—require more computational power and thus higher fees.
Frequently Asked Questions
Q: Why do I need ETH to send USDT on Ethereum?
A: Even though USDT is an ERC-20 token, Ethereum requires all transactions—including those involving tokens—to be paid in its native currency, ETH, to compensate validators.
Q: Can I use USDC to pay gas fees?
A: No. Only the native token of the network (e.g., ETH on Ethereum, MATIC on Polygon) can be used to pay transaction fees.
Q: What happens if I don’t have enough gas token?
A: Your transaction will fail. While the funds being sent won’t be lost, you may still lose the gas fee if the network processes part of the request before running out of fuel.
Q: Are Layer 2 fees cheaper than Ethereum mainnet?
A: Yes. Layer 2 solutions like Arbitrum and Optimism significantly reduce gas costs by batching transactions off-chain before final settlement on Ethereum.
Q: Can I send ETH from L1 to an L2 without bridging?
A: No. You must use a bridge service to move ETH from Ethereum mainnet to an L2 network like Arbitrum or Optimism. Sending directly via a standard transfer will result in fund loss.
Q: How do I know which network my tokens are on?
A: Check your wallet interface—it usually indicates the network (e.g., “Ethereum,” “Arbitrum One”). If unsure, consult a block explorer by searching your wallet address on platforms like Arbiscan or Polygonscan.
Avoid Costly Mistakes: Network Compatibility Matters
One of the most common—and preventable—mistakes in crypto is sending assets across incompatible networks. For example:
- Sending ETH intended for Arbitrum One via the Ethereum mainnet.
- Withdrawing MATIC from an exchange to a wallet address meant for Binance Smart Chain.
Such mismatches can lead to irreversible loss of funds. Always:
- Confirm both sending and receiving networks match.
- Use official bridges when moving assets between L1 and L2.
- When in doubt, send a small test transaction first.
👉 Stay protected with best practices for secure multi-chain transactions.
Final Thoughts
Navigating network fees doesn’t have to be complicated. By understanding that every blockchain requires its own native token for gas—and knowing how to obtain it—you can confidently engage with DeFi, NFTs, gaming apps, and more across Ethereum and Layer 2 ecosystems.
Whether you're new to Web3 or expanding your multi-chain strategy, staying informed about gas mechanics empowers you to transact efficiently, avoid errors, and make the most of today’s decentralized landscape.
Core Keywords: Ethereum, Layer 2, network fees, gas fees, ERC-20, blockchain transactions, crypto wallets, Web3