How Does Network Congestion Affect Gas Fees for Smart Contract Execution?
Network congestion increases demand for block space, causing users to bid a higher gas price to incentivize validators to include their transaction. This drives up the total gas fee.
During peak congestion, the cost of executing a simple smart contract function can become prohibitively expensive, especially on Layer 1 blockchains.
Glossar
Gas Fees
Mechanism ⎊ Gas fees represent the computational cost required to execute transactions or smart contracts on a blockchain network, particularly Ethereum and its Layer-2 solutions, functioning as a deterrent against denial-of-service attacks and a reward for network validators.
Network Congestion
Latency ⎊ Network congestion within cryptocurrency, options trading, and financial derivatives manifests as increased latency, directly impacting execution speeds and potentially leading to adverse selection against slower participants.