Overview of smart wallets and gas fees
đ¤ Network fees, commonly known as gas on EVM networks, are fees you pay to interact with blockchains.
Smart crypto wallets offer much more advanced features than traditional wallets, including:
transaction bundling
automated portfolio management
direct integration with decentralized finance platforms
improved security and recoverability
These features often combine sophisticated transactions into seamless actions, giving you a more intuitive and simplified user experience. But, the more complex the action, the higher the network fees. While these fees can be quite high on mainnet Ethereum, theyâre usually negligible on L2 chains.
đ§ Learn more about the advantages of smart wallets and how they optimize your transactions in our blog article.
Why are gas fees higher on smart wallets?
Network fees can be higher on smart wallets when performing more complex transactions like cross-chain swaps because smart wallets interact with multiple smart contracts to execute a single transaction.
For example, transaction batching bundles multiple transactions into one. While the fee might be slightly higher than a traditional single-contract transaction, batching can significantly reduce fees compared to executing each transaction individually. This makes smart wallets ideal for optimizing network fees.
Fees on smart wallets will also be higher when connecting to a network for the first time, known as âdeployingâ on that network. Read the next section about network deployment fees to learn more.
đĄ Learn how to reduce gas fees and optimize your transactions with Pass Appâs innovative features.
What are network activation fees?
Smart wallets deploy a smart contract when interacting with a network for the first time, which incurs an additional network deployment fee, referred to as an activation fee in Pass App. If youâre making a financial transaction with a network fee, like swapping or sending assets, Pass App combines the two fees, resulting in a higher fee than usual when you first use a new network.
For low-fee networks, like most L2s, this cost is minimal, usually adding a couple of cents to your transaction. For the mainnet network, i.e. Ethereum, the cost can be quite high, especially during periods of high network congestion.
Pass App partially sponsors your initial activation fee on Ethereum to bring the cost down for you. But we recommend checking gas on trusted sites like Milk Road and making your first transaction when prices are low.
When do I pay network activation fees?
You only pay the activation fee once per network on the first instance you interact with it. If you donât use a particular network, you never pay fees to connect to it.
The process of deploying your smart wallet on a network is triggered as soon as you confirm your first transaction on that network. This could include financial transactions like swaps and sends or simply connecting to a decentralized app (dapp).
The smart contract deployment is still triggered even if the initial transaction fails. This shows up in your transaction activity as a Sent transaction for $0.00, plus the deployment fee.
Do I need to pay an activation fee to buy or receive crypto?
Your smart wallet's address is determined before itâs deployed onchain. This means you can receive and buy crypto without paying the fees to deploy on a network for the first time.