When sending or swapping ERC-20 tokens from your DeFi Wallet, you may wonder why you need ETH (Ethereum) for that. The reason lies in the network fees associated with Ethereum blockchain. Here's a brief explanation:
The Ethereum network uses gas fees to process transactions. Gas fees are the costs associated with using the computational resources of the network. When you send ERC-20 tokens, you are executing smart contract functions on the Ethereum network, which requires these gas fees.
How ETH Network Fees Work:
Gas Calculation: Gas fees are calculated based on the complexity of the transaction and the amount of computational resources required. Sending ERC-20 tokens involves interacting with smart contracts, which requires more gas than a simple ETH transfer.
Gas Price: Gas fees are determined by the gas price, which is denoted in Gwei (which itself is a denomination of ETH). The gas price represents the amount you're willing to pay per unit of gas. Higher gas prices result in faster transaction confirmations, as it prioritize your transaction.
Fee Payment: Gas fees are paid in ETH. When you send ERC-20 tokens, a small amount of ETH is used to cover the gas fees associated with the transaction. This ensures that the transaction is processed by the Ethereum network.
It's important to note that the required amount of ETH for network fees may vary depending on the current network congestion and gas prices. Therefore, it's recommended to have a sufficient amount of ETH in your DeFi Wallet to cover these fees.
If you have any further questions or need assistance, please don't hesitate to contact our support team.