Fee Market
Also known as: Blockchain Gas Market, Transaction Fee Economy, Blockspace Auction
A dynamic system where users compete to pay higher transaction fees for faster blockchain confirmations.
A fee market is the mechanism by which blockchain users compete to have their transactions included in the next block. In networks like Ethereum, where block space is limited, users attach transaction fees to incentivize validators or miners. The higher the fee, the more likely the transaction is confirmed quickly. After Ethereum's EIP-1559, the fee market includes a dynamic base fee plus an optional priority tip. Fee markets are central to blockchain economics, balancing demand, network security, and user incentives. They can become congested during high demand, raising costs for all participants.