Network fees cover the cost of executing & committing transactions to the various blockchains.
On the Ethereum blockchain, there is an additional concept known as the "Gas Price" of a transaction when calculating network fees. This Gas Price is typically measured in gwei (10e-9 or 0.000000001 ETH). While any price can be offered, it is dependent on Ethereum network traffic conditions. If too low a price is offered, the transaction may not be mined and will not be included in the blockchain.
Since our users highly value speed and reliability of transaction execution, Switcheo uses an algorithm that ensures trade transactions on Switcheo get mined and confirmed quickly. This allows for quicker withdrawals when they are made shortly after trading (settlement time). The algorithm used is primarily based on the “Fast” value from https://ethgasstation.info:
If the calculated fee is determined to be too low after broadcasting, Switcheo does a "Replace-By-Fee" transaction, accelerating trade settlement by incentivizing miners to include Switcheo trade transactions in the next block to be mined.
The final network fee is calculated by multiplying the dervied Gas Price by the number of Gas needed to execute the Exchange Smart Contract. Trades typically consume about 200k Gas, depending on how the trade is matched.
For example, if the “Fast” value is 10 GWEI, and the transaction uses 274,000 Gas to execute, then the network cost would be (274,000 * (10 * 0.000000001)) ETH = 0.00274 ETH. This cost is chargeable to users as a network fee if the order value is small enough such that the trading fee works out to be less than 10x of the network fee.
To make the network fee calculation simpler for our users, we display the final estimated network fee amount at the bottom of the exchange window.
A full list of Network Fees can be found here.
To find out more information about Ethereum's transaction cost calculations: https://github.com/ethereum/wiki/wiki/Glossary