Glossary · Ledger

Fee market.

A pricing regime where users bid for inclusion. Higher fees mean faster confirmation.

Think of it as

An auction for blockspace. Higher tip means faster confirmation. Cardano deliberately avoids this so the same transaction always costs the same.

In depth

A fee market emerges when blockspace is scarce and fees are user-chosen. Bitcoin and most UTxO chains operate this way. Wallets estimate the going rate, sophisticated users pay tips, and low-fee transactions can sit in the mempool for hours when the chain is busy. Cardano deliberately avoids a fee market: the minimum fee is computed as a·size + b with protocol-set constants, and Plutus transactions add a fixed cost for their declared execution units, so two identical transactions always cost the same.

Example

During a Bitcoin congestion spike, a 200-byte transfer may pay 50,000 sat to confirm in the next block while another waits a day for 1,000 sat.

Next on this path

  1. Transaction fee The ada paid to the network for including a transaction. Deterministic on Cardano.
  2. Mempool A node-local pool of pending transactions waiting to be included in a block.