Tips for Saving Some Gas fee on ETH (Part-1)

in HODL2 months ago (edited)

Some 3 days back when I posted about providing a small liquidity to a newly listed pair, some readers rightly felt the impracticality of bearing the exorbitant gas fee for conducting small transactions.

I'd confess that I'm also very concerend when paying high Gas fee for small transactions. But what if you still want to make some transactions to participate in the DeFi rush?

This made me explore some options to save on Gas fee, wherever possible.

Personally, whenver I invest a small amount in any Liquidity Pool on Ethereeum or switch between pools, I take into account the 2-way Gas fee (for providing liquidity and withdrawaing it). If I expect a higher profit than the Gas cost, I proceed with the transaction. But I agree, it does restrict the no. of my transactions.

A simple thing is to wait for off-peak hours when the Netowrk is less congested by monitoring the estimated Gas fee on ETH Gas Station. But not all trnsactions can be postponed ...esp. the ones that are market sensitive. In fact, when there is a lot of price volatility, I prefer to send a little extra Gas for speeding up the transaction. So yeah, waiting for congestion to reduce isn't a good option in such cases.

But when providing liquidity to a pool, we can make use of some good tools.

Generally, first timers directly go to the Uniswap Exchange and make their transaction from its interface. After the recent introduction of wHIVE (and now wLEO) tokens on Uniswap, many people from this community are trying to interact with Uniswap out of curiosity.

However, starting with small amount can cost you a substantial share of your principal investment. You need to pay Gas fee for every transaction. E.g. if you want to provide liquidity to ETH-wHIVE pair, you will first pay Gas fee for swapping some ETH for wHIVE (or for converting & transferring your HIVE to wHIVE into your ERC20 wallet). Then for supplying your ETh & wHIVE to pool, you will need to make 2 transactions - one for Approval and second for transfer. You will receive LP tokens in return and in case you want to stake those LP tokens to mint some other coin, it will again require 2 transactions. When redeeming your LP tokens it will be another transaction.

With gas fee varying between $3 to $8 (or more) per transaction, spending anywhere between $20 to $30 to provide liqidity is quite normal these days.

However, now I don't use Uniswap Exchange interface anymore. There are so many great tools with beautiful dashboards to track and manage all your assets from one place that I find them better to use instead. These tools can track your investment on multiple protocols including Compound, Maker DAO, Balancer, Aave, Synthetics, Yearn.Finance, 0x etc. from a single interface. DeFi Saver, InstaDapp, Yield Farming Info, DeBank, MyDeFi, zerion, FURUCOMBO, Pools etc. tools are helping yield farmers to manage their portfolio conveniently.

Everyone of these tools have some good features. But I personally like Zapper the most. To be honest, I haven't used them all but somehow Zapper solved most of my purpose. Of course, mobile users may tend to incline towards Zerion but I access my account mostly from my laptop. So I love Zapper.

Most importantly, tools like Zapper & FURUCOMBO saves you some Gas fee while making your life easier.

Zapper presents my investment into well-categorized heads and graphical representations as well. E.g. here are some screenshots of one of my wallets:

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With Zapper, you won't need to make multiple transactions of swapping, approving and transferring. Everything can be achieved in a single click. So you basically have to make only one transaction. And this can save you upto 40% on your Gas fee.

FURUCOMBO app also make it possible to create a customized single transaction by arranging all DeFi legos into one by simply dragging and rearranging cubes to set the order of transactions. But I find Zapper interface more intuitive and user-friendly. DeFiZap is yet another tool to achieve this thing.

The point I wanted to make is that you can make use of these tools to combine multiple actions into one single transaction and thus save on some Gas fee.

If it's still too high for you, you can experiment using similar Exchanges on other blockchains like JustSwap on Tron (hopefully Steemit wallet will get integrated soon to provide STEEM in some liquidity pool on JustSwap) or use DefiBOX on EOS blockchain. Of course, you won't find all those ERC20 coins on those blockchains but still there are plenty to experiment and learn some yield farming there :)

We hope solutios like UniFi DeFi or UniFi Protocol by Seasame SEED are made available soon to make gas-free cross-blockchain DeFi possible.

I'd try to tell you about some more simple ways to save on ETH Gas in the next part.

Thanks for reading until the end!

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great article transaction fees are a real concern on uniswap and if there are options then why not explore them. one quick question can i remove the liquidity that i added via uniswap via zapper. Also to be frank I invested 0.7 eth on sushi reading your post on this project. But on uniswap I did lose much on transaction fees..

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i just randomly checked harvest Sushi also takes alot of fees? What are your thoughts on the same. And another question that I've this SUSHI- ETH pool that I've created reamains there until I dont unstake and gets me Sushi share for every 1k block. Is that the right assumption to make.

  • Also one quick question; why is it that liquidity pool shows 5.073; wherein I provided liquidity for 39 Sushi

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Once again great article. Thanks for sharing.

Yes, I think you should be able to remove liquidity but for that LP tokens should be in your wallet. So unstaking LP from SushiSwap will be a transaction you will need to make separately.

Regarding yields, I ain't too sure. I don't harvest so frequently. In fact, I haven't harvested so far. What do you do from your harvest? Are you selling them right away?

Yes you get block rewards on your liquidity but I think that is 1000 SUSHI on every block distributed to all staked LP proportionately.

Finaly, 5.073 is not your SUSHI but LP. You can login to your Zapper dashboard and check your actual SUSHI in the pool (I've provided the screenshot of my holdings from this pool only). The ratio of your ETH and SUSHI will change with every trade in the pool and 0.3% fee will be added to the pool. If SUSHI nos. are reduced then your ETH mush have increased. The product of these two will always remain constant + 0.3% fee.

Hope this clarifies a little. I ain't an expert as I'm also learning :)

yes, it clarifies a lot of my doubt. Thank you. Today morning only I had staked LP and so far havent earned much that should cover the transaction fees. I'm not planning to harvest until, I'm able to pull in the investment made. So holding and harvesting Sushi till that time. How much of LP you got. For me investing 0.7 ETH got me close to 5 Sushi LP. Thanks once again for all the information.

I invested 1 ETH butg have got less LP than you. It's like 4.7 or 4.8 something.
But my investment has grown 3x by now and I'm very much satisfied with that.

cool. good luck.

isn't Sushi just like another Yam, or what is it ??

I started to use Zapper but I didn't know that you can save around 40% in gas fees.

Well, actually it depends. Smme times it's less, sometimes more. But I can say there is some saving for sure. Do share your experience of using Zapper.
I also like the feature that allows us adjustment of slippage tolerance level to as low as 1%.

I might plan to create a vlog about Zapper soon. :)

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how's it going? staying well i hope

it's gotten brutal, i paid $15 yesterday, and that was like a good deal. i got a quote today and it would have been $75 in gas! it's getting i can't even move crypto.

i glanced over your article but didn't see loopring, have u tried or would recommend that? ty

Well, I haven't tried any second layer solution on Ethereum yet (though I had used Lightening Network on Bitcoin).However, I've been thinking to check LRC & MATIC for a month now :). But I don't frequently interact with same addresses, so I don't know how that can save me on gas. Would love to read a review from users like you.

https://zapper.fi/ is surely a great and easy to use tool you post reinforced my trust and thanks for the comparative study.
Look forward to Part II dear @xyzashu

Good to know that you too are on Zapper.
Oh yes, I'll like to come up with part-2 soon ...may be tomorrow.
Thanks a lot for your interest!