When trading NFTs on OpenSea, the overall biggest NFT trading platform in the crypto ecosystem, gas fees are one important part that just cannot be left out. Your profitability as an NFT trader could be shortened or maximized with an adequate understanding of how fees work on OpenSea.
What Are NFT Gas Fees?
Gas fees are not peculiar to NFT trading. Gas fees are associated with all forms of transactions that are completed on a blockchain. They are fees made to miners (or validators) who confirm transactions on the blockchain. NFT transactions on OpenSea are completed on the blockchain; hence, the NFT gas fees are paid to the miners or validators to ensure a legitimate NFT transaction, thereby securing the network.
Although OpenSea is compatible with the Solana blockchain, it runs majorly runs on the Ethereum network.
What Gas Fees Are Paid On OpenSea?
Gas fees are applicable on OpenSea whether you are purchasing or selling an NFT. Several steps along the way of the transaction are confirmed and recorded in the blockchain, and miners get a share of these. The following fees are paid during NFT trades on OpenSea.
- Contract Approval Fees: If you are interacting with a particular NFT collection for the first time, you will be required to pay a one-time gas fee to connect your wallet with the collection’s contract. For example, if you are interacting with Mutant Apes NFT collection for the first time, you would need to permit a smart contract to permit future transactions. Hence, all further transactions conducted on Mutant Apes will not require another contract approval fee. However, if you need to interact with Bored Apes Yacht Club, you would need to pay another one-time gas fee.
- Token Approval Fees: To start spending and receiving (fungible) tokens for NFTs, you are required to pay a one-time fee for interacting with the token’s contract. For example, NFT transactions on the Ethereum Network are completed by spending Wrapped Ether (WETH); hence, for the first transaction, WETH must be approved via a smart contract. Subsequently, you won’t need to approve tokens for transactions.
- Offer Acceptance Fees: After bids come in for your listed NFT on OpenSea, you have the option to accept a bid or ignore it. If you choose to accept a bid, you will pay some fees. First, you will pay the standard OpenSea commission (which is 2.5% of the selling fee), and then any creator royalty will be deducted (if applicable). Note that these are just regular charges; you still have to pay gas fees for accepting the bid and recording it on the blockchain. Of course, gas fees cannot be estimated beforehand; it is usually determined by network congestion and other blockchain factors.
- NFT Transfer Fees: If you intend to gift an NFT to someone or transfer NFT without going through the official sales process that involves making offers and accepting bids, you will still have to pay gas fees because the transaction must be recorded on the blockchain. However, you do not need to pay other fees.
- NFT Purchase Fees: When buying NFTs outrightly, without going through the bidding and auction process, the buyer, and not the seller, pays the gas fees.
- NFT Delisting fees: Delisting an NFT would cost you gas fees unless you are the original creator of the NFT; however, if you acquired it as part of a collection and then listed it for sale, you would need to pay a delisting fee. However, if you set an expiry date for the NFT sale, the item will automatically be delisted on the said date.
- NFT bid withdrawal: If you have a recorded bid on an auction, you would need to pay some gas fees to withdraw your bid. However, if your bid isn’t accepted, you won’t need to pay gas fees, and you can use your tokens to purchase other NFTs.
- Converting ETH to WETH: It is possible to buy and sell ETH tokens on exchanges; however, most NFT transactions are completed with Wrapped Ether (WETH). Hence, it is necessary to convert ETH to WETH for NFT transactions; similarly, you need to convert WETH to ETH to lock in your profits and trade them on exchanges. The value of 1 ETH = 1 WETH; however, converting to and fro would cost gas fees.
Can I Avoid Paying Gas Fees on OpenSea?
Generally, gas fees are common when making transactions on the blockchain; however, you may avoid paying some gas fees through proper planning. For example, if you aren’t sure about listing an item yet, do not place it up for sale, or else you will have to pay delisting fees (unless the expiry date is reached). Similarly, if you are unsure of your intention to purchase, do not bid for an NFT because withdrawing a bid costs gas fees.
However, generally, sellers may avoid paying gas fees on OpenSea by listing NFTs at a fixed price, such that the buyer pays the gas fees, and they pay nothing.
Gas fees are important for securing and maintaining blockchains; however, you don’t always have to pay them if you plan your transactions right. Also, if you intend to transact via the Ethereum network, it may be helpful to check out the average gas prices on the Ethereum Network via the Etherscan Gas Tracker to know whether to wait out network congestion or complete the transaction immediately.