diff --git a/src/Managing.Web3Proxy/src/plugins/custom/privy.ts b/src/Managing.Web3Proxy/src/plugins/custom/privy.ts
index 2e771b78..4b0b7ec2 100644
--- a/src/Managing.Web3Proxy/src/plugins/custom/privy.ts
+++ b/src/Managing.Web3Proxy/src/plugins/custom/privy.ts
@@ -11,7 +11,7 @@ import {ARBITRUM} from '../../generated/gmxsdk/configs/chains.js'
 import {TOKENS} from '../../generated/gmxsdk/configs/tokens.js'
 import {CONTRACTS} from '../../generated/gmxsdk/configs/contracts.js'
 import {getClientForAddress, getTokenDataFromTicker} from './gmx.js'
-import {Address, erc20Abi} from 'viem'
+import {Address, erc20Abi, formatEther, parseEther} from 'viem'
 import {Balance, Chain, Ticker} from '../../generated/ManagingApiTypes.js'
 import {getCachedPrivySecrets} from './privy-secrets.js'
 
@@ -1296,6 +1296,72 @@ export const sendTokenImpl = async (
     const walletId = await getWalletIdFromAddress(senderAddress, fastify);
 
     if (ticker === 'ETH') {
+      // For ETH transfers, we need to reserve gas fees
+      // Get SDK to access public client for balance and gas estimation
+      const sdk = await getClientForAddress(senderAddress);
+      const balance = await sdk.publicClient.getBalance({ address: senderAddress as Address });
+      
+      // Estimate gas for the transfer
+      // Use a test amount (1 ETH) to estimate gas, then scale if needed
+      const testAmount = parseEther('1');
+      let estimatedGasLimit: bigint;
+      try {
+        estimatedGasLimit = await sdk.publicClient.estimateGas({
+          to: recipientAddress as Address,
+          value: testAmount,
+          account: senderAddress as Address,
+        });
+      } catch (error) {
+        // If estimation fails, use a conservative default (21,000 is standard for simple transfers)
+        console.warn('Gas estimation failed, using default:', error);
+        estimatedGasLimit = 21000n;
+      }
+      
+      // Get gas price
+      const feeData = await sdk.publicClient.estimateFeesPerGas({
+        type: 'legacy',
+        chain: sdk.chain,
+      });
+      let gasPrice = feeData.gasPrice || 0n;
+      
+      // If gas price is 0 or unavailable, use a conservative fallback
+      // Arbitrum typically has gas prices around 0.1-1 gwei, so 1 gwei is a safe fallback
+      if (gasPrice === 0n) {
+        console.warn('Gas price estimation returned 0, using fallback of 1 gwei');
+        gasPrice = 1000000000n; // 1 gwei = 1,000,000,000 wei
+      }
+      
+      // Calculate gas cost with 30% buffer for safety
+      const gasBufferMultiplier = 130n; // 30% buffer
+      const gasCost = (estimatedGasLimit * gasPrice * gasBufferMultiplier) / 100n;
+      
+      // Calculate the maximum amount we can send (balance - gas cost)
+      const maxSendableAmount = balance > gasCost ? balance - gasCost : 0n;
+      
+      // Use the minimum of requested amount and max sendable amount
+      const actualAmountToSend = amountBigInt > maxSendableAmount ? maxSendableAmount : amountBigInt;
+      
+      if (actualAmountToSend <= 0n) {
+        const balanceEth = formatEther(balance);
+        const gasCostEth = formatEther(gasCost);
+        throw new Error(
+          `Insufficient ETH balance. Balance: ${balanceEth} ETH, ` +
+          `Estimated gas cost: ${gasCostEth} ETH. ` +
+          `Cannot send any amount as balance is less than required gas fees.`
+        );
+      }
+      
+      // Log if we adjusted the amount
+      if (actualAmountToSend < amountBigInt) {
+        const requestedEth = formatEther(amountBigInt);
+        const sendingEth = formatEther(actualAmountToSend);
+        const gasCostEth = formatEther(gasCost);
+        console.log(
+          `⚠️ Adjusted ETH transfer amount: requested ${requestedEth} ETH, ` +
+          `sending ${sendingEth} ETH (reserved ${gasCostEth} ETH for gas fees)`
+        );
+      }
+      
       // Native ETH transfer: no allowance, no data, value is amount as hex string
       const { hash } = await privy.wallets().ethereum().sendTransaction(
         walletId,
@@ -1304,7 +1370,7 @@ export const sendTokenImpl = async (
           params: {
             transaction: {
               to: recipientAddress as Address,
-              value: '0x' + amountBigInt.toString(16), // value in wei as hex string
+              value: '0x' + actualAmountToSend.toString(16), // value in wei as hex string
               chain_id: chainId,
             }
           },