Web3 Transaction Types explained




Aug 15, 2023

In the decentralized world of the Ethereum network, every action and interaction hinges on Web3 transactions. Whether you're looking to send some Ether, deploy a smart contract, or make a call to a decentralized application (dApp), it all boils down to a transaction. Think of these as the heartbeats of the network, transferring value, data, or both, in a manner that's transparent and verifiable by all participants of the network.

Embarking on a journey into the intricate world of Web3 transactions? You've landed at the right place. This article is tailored to give you a comprehensive overview, starting from the basics of what Web3 transactions are, diving into their diverse types, elucidating the processes to sign them, and culminating with best practices you should always have at your fingertips. So, buckle up, and let's decode the mysteries of Web3 transactions together!

Importance of understanding different types of Web3 transactions

Picture this: you're a developer gearing up to launch a dApp, or perhaps a user eager to participate in the next big decentralized finance (DeFi) project. Understanding the nuances of the transactions you're executing can make a massive difference.

For developers, it's about ensuring that the code runs seamlessly, without any unexpected hitches or excessive gas fees. For users, it's about safely and confidently navigating the space, being sure of what you're committing to, and avoiding costly mistakes. At its core, this knowledge acts as a safeguard, enabling smoother operations, optimizing costs, and fortifying security measures.

What is Web3?

The evolution of the internet has been both rapid and revolutionary. If Web1.0 gave us static websites and Web2.0 introduced interactive platforms with user-generated content, then Web3 ushers us into an era where decentralization is the name of the game. No longer are we bound by the constraints and whims of centralized entities that control and often monopolize data and platforms. Web3 embodies the vision of a decentralized internet infrastructure, leaning heavily on the groundbreaking innovations brought forth by blockchain technology.

Instead of data being stored on centralized servers owned by a few corporations, Web3 disperses this data across a decentralized network. At its core, Web3 operates on a peer-to-peer network where every participant (or node) holds a copy of a shared ledger. When a transaction occurs, instead of a central authority validating it, the network reaches a consensus. Once confirmed, these transactions are immutable, meaning they can't be altered or deleted. This structure brings forth an unprecedented level of transparency since any alteration or tampering would require consensus across the majority of the network – a feat practically impossible to achieve without being noticed.

Types of Web3 Transactions

  1. Ether Transactions: At the very core of the Ethereum network is its native cryptocurrency, Ether (ETH). When you transfer this currency from one account to another, you're making an Ether transaction. It's akin to a digital form of handing cash to someone.

  2. Contract Transactions: Ethereum's true power lies in its ability to execute smart contracts – self-executing contracts where the terms of the agreement or conditions are written into lines of code. When you interact with such a contract, whether you're deploying a new one or invoking a function in an already deployed contract, it's termed a contract transaction.

  3. Token Transactions: Beyond Ether, Ethereum supports tokens that can be thought of as custom cryptocurrencies built atop the Ethereum platform. The most famous standard for these tokens is ERC20, but there are others like ERC721 and ERC1155. A token transaction pertains to the transfer of these tokens between accounts. It's a form of contract transaction but focuses on the specific token's contract.

  4. Message Transactions: Sometimes, the purpose of a transaction isn't to transfer value (Ether or tokens) but to send a piece of data or a specific message. This kind of transaction is termed a message transaction. They are essential for many dApp functions where the objective is to change a state or store information without a direct transfer of value.

Differences between different types of transactions

Every transaction on the Ethereum network is a transfer of data. However, the type, structure, and even the gas cost (transaction fee) can differ depending on the nature of the transaction:

  • Data & Purpose: An Ether transaction primarily deals with the transfer of ETH value, whereas a token transaction involves interacting with a smart contract to transfer tokens.

  • Gas Costs: Simple Ether transactions often have a standard gas cost. However, contract and token transactions can vary widely in gas costs depending on the complexity of the contract functions being invoked.

  • Payload: Message transactions might not carry any value but will have data that represents the message or function call.

Examples of each type of transaction

  • Ether Transaction: Alice sends 1 ETH to Bob. The transaction specifies the sender (Alice's address), receiver (Bob's address), and amount (1 ETH).

  • Contract Transaction: Alice interacts with a decentralized exchange's smart contract to swap her ETH for DAI (a stablecoin). The transaction will specify the contract address, the function to be invoked, and any necessary parameters.

  • Token Transaction: Alice sends 100 DAI tokens to Bob. While it appears similar to an Ether transaction, it essentially involves a contract transaction with the DAI token's smart contract.

  • Message Transaction: A game on Ethereum might allow users to set their character's name. Alice sets her character's name as "StarPlayer." This would be a message transaction, invoking a function on the game's contract, with the character name as the data payload.

Source: Ethereum's official documentation provides a deep dive into the nuances of transactions and how they interact with the network.


The decentralization movement, epitomized by Web3, brings forth a transformation in how we perceive and interact with the internet. Central to this transformation is the concept of transactions on the Ethereum network. From the foundational understanding of what Web3 represents, to the nitty-gritty of various transaction types, signing methods, and the tools that facilitate these actions, we've embarked on a comprehensive journey. Understanding these details is more than just acquiring knowledge; it's about being equipped to participate confidently in the burgeoning decentralized landscape.

The dawn of Web3 is more than just a technological evolution; it's a philosophical shift towards a more transparent, equitable, and decentralized digital ecosystem. While the terrain is filled with novel concepts and processes, it promises a future where users have greater control, security, and freedom. As with all technological advancements, education and adaptability are keys. The Ethereum ecosystem, with its ever-evolving tools and platforms, beckons all to stay informed, practice safe interactions, and remain curious. Here's to a decentralized future, where the power truly rests in the hands of the many rather than the few.

Schedule a Demo

The call is completely free and no commitment is required.

Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and

no commitment is required.