A transaction fee is the amount of money that a user must pay to engage with a blockchain network, such as sending cryptocurrency from one wallet to another, exchanging tokens, or interacting with decentralized applications (dApps). The transaction fee is paid using the blockchain’s native currency.
Why is the Transaction Fee Paid
The purpose of a transaction fee is to sustain the blockchain network by compensating validators for processing transactions. It serves as an incentive for validators to perform their tasks in the blockchain network.
Transaction fees are not fixed and can vary depending on the specific blockchain network. They tend to increase during times of high demand when many users are performing transactions simultaneously. By paying a higher transaction fee, users can bypass the queue and have their transactions processed more quickly.
Transaction Fee as a Security Measure
One of the schemes deployed by hackers to take over a network is bombarding it with transaction requests. This overloads the network and ceases its normal functioning. On the blockchain, transactions come with a fee which increases accordingly with demand. This makes sending large amounts of transactions expensive.
On a similar note, validators are rewarded with the transaction fee for acting justly on the network and punished for doing otherwise. This measure secures the blockchain network.
Transaction of 5ireChain
Native Chain Fee
Transaction fees are charged to cover the computational costs incurred by the 5ireChain network. The transaction fee contributes to the security of the 5ireChain network and is used to prevent bad actors from spamming the network by levying a fee for each computation conducted on it.
Calculation formula = base_fee + length_fee + [targeted_fee_adjustment * weight_fee]
Base fee: This is the minimum amount a user pays for a transaction. It is declared as a base weight in the runtime and converted to a fee using Weight To Fee.
Weight fee: A fee proportional to the amount of weight a transaction consumes.
Length fee: A fee proportional to the encoded length of the transaction.
Targeted fee adjustment: This is a multiplier that can tune the final fee based on the congestion of the network.
EVM Chain Fee
To conduct a transaction on the 5ire EVM chain, users are required to pay a transaction fee, also known as a gas fee.
From a technical standpoint, gas is the unit of measurement for the total amount of computational effort needed to perform particular operations on the 5ire network. The payment of the gas fee is made through 5ire, the native currency of 5ireChain (and the 5ire EVM Chain). It is denoted in Coins.
Gas Price Calculation: gasPrice * gasAmount/1018