Gwei, short for Giga-Wei, is often used to describe gas fees on Ethereum’s network. It’s also known as nanoether and corresponds to 10^9 or 1,000,000,000 wei.
Gwei, a merger between the words giga (a prefix that identifies billion) and wei, is a small denomination of ether, the digital currency used on the Ethereum network. There are one billion wei in one gwei, and 10^9 or 1,000,000,000 gwei in one ether.
Gwei is also referred to as nanoether or “shannon” in tribute to Claude Shannon, a prominent American mathematician, and cryptographer regarded as the father of information theory.
Despite the importance of wei, the most commonly used unit of ether is gwei. It is used to pay for the computational power and transaction fees or “gas.” The standard transaction fee is 21,000 gwei, but this value could rise proportionately to the underlying complexity of the transaction.
After the Ethereum London Hard Fork and the Ethereum Investment Proposal (EIP) 1159, the fee mechanism has changed through Alchemy, and the formula to calculate the transaction fee is Gas Units (Limit) x (Base Fee + Tip).