Blockchain-based finance eliminates intermediaries and reduces transaction costs, but users still have to pay “gas” fees. These fees compensate miners or validators who process payments and secure the blockchain. While gas fees are typically lower than traditional bank fees, they can be expensive in certain situations. Ethereum, for instance, is known for high gas fees during periods of heavy traffic, forcing users to pay hundreds of dollars for timely transactions.
Fortunately, the crypto industry is innovative and offers ways to reduce gas fees. One effective method is transaction batching, which involves bundling multiple payments into a single transaction, reducing gas fees significantly. Ambire Wallet is at the forefront of this innovation, enabling transaction batching through smart contracts that process multiple transactions simultaneously and distribute the outcomes to recipient wallets. Users only have to pay the gas fee once, regardless of the number of transactions batched.
Transaction batching is particularly useful in decentralized finance (DeFi) and during network congestion. In DeFi, users often need to make multiple transactions to swap tokens and move funds across protocols. During peak times of network congestion, gas fees become exorbitant, making batching transactions a cost-saving solution.
While there are alternative methods to reduce transaction costs, such as using Layer-2 networks or special gas tokens, transaction batching is an elegant and efficient solution. It can be applied in various scenarios, such as batching transaction approvals and swaps, multiple swaps on the same network, purchasing and staking tokens, or sending payments to different addresses. By bundling these transactions, users can save on gas fees.
For example, let’s consider Joe who wants to buy an NFT on the Flow blockchain but needs to convert his obscure token, FET, to FLOW. This requires swapping FET to ETH and then ETH to FLOW, resulting in three transactions. However, by batching these transactions, Joe only pays one fee, reducing his total gas fees significantly.
Transaction batching offers benefits beyond cost-saving. It improves security by reducing the attack surface and offers a simulation feature that allows users to preview batched transactions, minimizing errors. Additionally, it enhances scalability for blockchains by reducing the overall network load.
Overall, transaction batching is a game-changer for blockchain users, saving them time and money. Ambire Wallet, for instance, claims to have saved its customers $27,000 on gas fees since introducing this feature. This innovation showcases how cryptocurrency is revolutionizing finance by providing advantages not possible with traditional systems.