I recently signed up for Coinbase Earn and went through the Compound tutorial where you can earn $20 in COMP. In one part of the tutorial Coinbase/Compound gives you $7 Ethereum for gas costs and $3 USDcoin to lend out on the Compound platform.
Compound is a defi lending platform where users can lend out their crypto in return for interest and also receive small fractions of the COMP token. Compound is one of the only platforms to do this, which makes it very attractive. However the currencies that are available right now is quite limited, and the earning percentages seem low compared to other platforms.
But since I’m getting all of this for free, why not try it out!
I followed the tutorial which for the most part is completely automated and requires not much more than just a few clicks. The first thing that I noticed though, was that the confirmation time for my transaction took a while.
Of course before this I had heard about Ethereum transactions and Gas costs, but I had never tried it out before. The process finishes and I’m now lending out $3 on Compound, so I think awesome! What else can I do with it now?
Because I had finished all the lessons on COINBASE Earn, I was now holding $20 in COMP. Compound also lists their own COMP token as available to lend out, so I decide to lend out the COMP as well. (which you then again earn COMP with!)
And this is where things got a little tricky
First I had to pay Ethereum to be able to supply COMP on Compound, strange I thought, but ok. Afterwards I tried to initate my transfer of COMP and suddenly I’m being asked to pay quite a high amount of Eth for the transaction.
Not knowing I could look up gas costs, I just waited for a while to get a low price for the transaction. I click submit and my wallet makes the transfer.
I wait………and I wait………..and I wait, but nothing happens.
Compound says I can look up the transaction on Etherscan, so I go there.
Well apparently I did a pretty good job of getting a low transaction cost, a little too good actually. My max transaction cost is 16 gwei. Gwei just means a fraction of Ether. Just like Satoshi with Bitcoin.
My transaction got stuck, because very quickly after I initated my transfer, gas costs went up!
Ethereum transaction costs are based on how busy the Ethereum network is. Miners have to include your transaction in blocks, and this is how they get processed. If people are willing to pay higher transaction costs than you, then your transaction has to wait until costs come down.
After learning this, I decide to wait it out, but after a few days I start to get worried if I did something wrong.
A lot of guides online tell you not to offer too low of a fee, or how you might be able to cancel or change the transaction. But I never got the chance to do that! The Coinbase wallet just quoted me a price and I clicked accept.
In the end it took over 4 days of waiting before my pending transaction was processed!!!
So before you try out an Ethereum transaction for the first time, don’t worry too much if your transaction gets stuck for a while! Just wait for costs to come down eventually.
Consider if the transaction is worth it or if you are do it sometime later. You can track costs at Etherscan and ETH Gas Station. And if you really make a mistake check out Metamask. You can fix transactions with METAMASK if you really need to!
You can follow this tutorial if you want!
Thanks for reading and I hope this has helped you, or a least given you a little peace of mind!
