Transaction Fees

Transaction fees in the æternity blockchain serve multiple purposes: preventing spam, compensating miners, and prioritizing transactions. The fee structure is designed to work efficiently with the Bitcoin-NG consensus mechanism and support various transaction types while maintaining network sustainability.

Fee Structure

Every transaction in æternity requires a fee paid in AE coins. The fee consists of two main components: a base fee that varies by transaction type, and a computation fee based on the complexity of the operation. For smart contract executions, the computation fee is calculated using gas, similar to other blockchain platforms, but with optimizations specific to the FATE virtual machine.

Fee Distribution

The Bitcoin-NG consensus model influences how transaction fees are distributed. When transactions are included in micro blocks, the fees are split between the current leader who created the micro block and the miner who creates the next key block. This split incentivizes both efficient transaction processing and network security, with 40% going to the micro block creator and 60% to the next key block miner.

Fee Calculation

Transaction fees are calculated based on several factors including transaction size, computational complexity, and current network conditions. Smart contract executions include gas costs that reflect the computational and storage resources required. The FATE virtual machine's efficient design helps keep these costs predictable and reasonable for users.

Dynamic Fee Adjustment

While base fees remain constant, effective transaction fees can vary based on network conditions. During periods of high network usage, users may need to offer higher fees to ensure their transactions are processed promptly. The node software helps users estimate appropriate fees based on current network conditions.

Fee Burning

A portion of certain transaction fees, particularly those related to name registration and oracle operations, may be burned (permanently removed from circulation). This mechanism helps manage token supply while adding cost to certain network operations that consume long-term resources.

State Channel Fee Considerations

Transactions within state channels typically don't incur on-chain fees, as they're processed off-chain. However, channel opening, closing, and dispute resolution transactions do require standard network fees. This fee structure makes state channels particularly efficient for high-frequency interactions between parties.