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Let’s start with a situation that may sound familiar. You are very excited. You have found a new ICO crypto, you have done all your research and you are ready to invest $ 100. You are going to make the transaction, but then your cryptographic wallet shows you a big surprise. The transaction rate is $ 80!
You may be thinking: “How is this possible?” You just discovered the “toll rate” of the cryptographic world. This frustrating cost is called a “gas rate”, and can turn a good investment into a bad if it is not prepared.
This guide will be your simple road map. We will break down what gas rates are, why they are important and give it a clear and step -by -step strategy to understand the role of gas rates in ICO participation.
The basic concepts: What is a “gas rate”?
Before we can understand the problems with gas rates, we must first understand the basic concepts. A gas rate is not as complicated as it seems.
Blockchain “road” toll
The easiest way to think about a gas rate is to imagine that it is like a toll that you have to pay to use a busy road. The block chain is that road, and its transaction, how to buy a token, is your car.
Every time you send a transaction in the block chain, you must pay a small rate. This rate goes to people who keep the road running without problems and safely. These people are called miners or validators.
When the road is empty and has very little traffic, the toll is very cheap. But when it comes to the peak time and the road is full of cars, the toll goes up. It is exactly the same in the block chain.
The “Gas War”
Now that you understand the basic rate, let’s see why you can sometimes go completely crazy. This often happens during a popular ICO.
A war war to enter first
A “gas war” is basically a war of offers. During a very popular ICO, in order of arrival, thousands of people are trying to send their transactions at the same time. The block chain can only process a certain number of transactions at the same time, so there is a long line.
To obtain their transaction at the head of the line, investors begin to offer to pay an increasingly high gasoline rate. This increases the “toll price” for everyone else. In the end, only people who are willing to pay more for the gas will obtain their transactions. All others are trapped in traffic.
The impact on small investors
This is a big problem for usual and small investors. If you only want to invest $ 100, it makes no sense to have to pay a gas rate of $ 150. Gas Wars can make it almost impossible for small players to participate fairly in a sale.
Worse, if you pay a high gas rate, but it is not yet high enough to win the offers war, your transaction can fail. The most painful part is that he often loses the gas tariff that he paid, although he has nothing in return. This is a critical part to understand the role of gas rates in ICO’s participation.
How to avoid gas wars
The good news is that you don’t have to be the victim of these gas wars. Here are five simple strategies that you can use to avoid and protect your money.
Looking ICO with a fair launch structure
The number one cause of a gas war is a sale “by order of arrival” (FCFS). This is where everyone rushes at the same time to try to buy. The best way to avoid this is to look for a different and more fair system.
A white list or a lottery system is much better for small investors. In this model, you can request a place to invest in advance. If you are lucky to win a place, you are given a specific window to make your investment without having to compete against anyone else.
Participate in ICO longer, “slowly burned”
Not all ICOs are a frantic event of one hour. Many classic initial coins (ICO) offers will be executed for several days or even for a few weeks.
In these sales of “slow burns”, there is no hurry to invest in the first second. You can take your time, wait for the network to be less busy and make your transaction when gas rates are low.
Explore projects in cheaper blockchains
Gas wars are more famous in the Ethereum block chain. This is because Ethereum is the most popular “road” often the most congested. One of the easiest ways to avoid high rates is to look for projects in other cheaper blockchains.
The newest networks like Solana, Polygon, Avalanche and the BNB chain were built to be faster and have much lower rates. When you are sailing on platforms for the next cryptography presales, it must make it a habit to verify in which blockchain the project is based. This little detail can save a lot of money.
Budget for gas rates in advance
This is a very important advice. When you are planning your investment, not only budget the tokens you want to buy. You must also budge the gasoline rate.
If you want to invest $ 100, you should make sure you have enough extra cryptographic, such as ETH or BNB, in your wallet to cover the rate. You can verify current cryptography prices to see how much your gas currency is worth so you can plan correctly.
Use a gas trashing tool
If you still want to participate in a competitive launch, at least you must be prepared. A gas tracker is a simple website, such as Etherscan Gas Tracker, which shows current gas rates on the network in real time.
This can help you see if it is a good or bad time to send a transaction. It gives you more information so you can make a better and more informed decision.
Conclusion: Invest smarter, not just faster
Let’s make a quick summary. A gas rate is the toll that pays to use the block chain. A gas war is a bidding war where investors compete to process their transactions first when paying increasingly high tolls. This is a big problem for small investors.
The best way to win a gas war is not to fight in it at all. When choosing ICO that have fair lottery systems, when exploring projects in cheaper blockchains and participating in longer -term sales, it can almost completely avoid this frustrating problem.
For now, you must have a clear understanding of the role of gas rates in ICO’s participation. This knowledge allows you to protect your money and make smart and strategic investment decisions. If you ever need help to analyze the mechanics of launching a project, it is always a good idea to contact a team of experts to obtain support.
