Transactions on the Ethereum blockchain can take various forms, extending beyond straightforward ETH transfers from one address to another. Examples of different transaction types include:
A transfer of ETH from one address to another.
- A transfer of ERC20 tokens from one address to another.
- Exchanging ERC20 tokens for another ERC20 token.
- Borrowing ERC20 tokens from a borrowing service.
- Numerous transaction types can occur on the Ethereum blockchain. The primary factor influencing the transaction fee for different transactions at any given moment is the complexity of the individual transaction:
- The more complex a transaction is, the more computational steps it involves.
- The more computational steps, the higher the fee for the transaction.
Considering the above, the simplest and most cost-effective transaction type on Ethereum is the plain transfer of Ethereum tokens. In contrast, a transaction that exchanges one token for another is more complex and typically incurs a higher cost than sending ETH tokens. Importantly, the transaction fee is not dependent on the amount of Ethereum or tokens being transacted.