UniSwap fees can be broken into a few categories. The first is called the liquidity pool fee, which is a flat platform fee for swapping any two cryptocurrencies on the platform. For end-users, think of this like your standard transaction fee on a regular broker. On UniSwap, this is just 0.3 percent.
The next (and probably the biggest) fees you face are gas fees. UniSwap has no control over gas fees which are entirely due to Ethereum’s congestion issues. Gas is used to pay for transactions of all cryptocurrencies built on the Ethereum blockchain. Considering how popular Ethereum has become, not to mention the rise of ERC-20 altcoins and Ethereum-based NFTs, it’s not surprising the Ethereum blockchain can’t handle this traffic.
Unlike major credit card companies, which can process thousands of transactions a second, Ethereum can only process 14 transactions per second. Gas fees are skyrocketing because demand for transaction bandwidth is crazy high, while the supply remains steady. The planned Ethereum 2.0 upgrade could radically lower gas fees, but we won’t see a full launch until later this year. For most crypto traders, gas fees are the biggest reason why it seems like fees are so high on UniSwap.
Read More: Why are UniSwap Fees So High?