Transaction Fees

When creating an Avalanche L1 we cannot only configure our custom native token, but also how the transaction fees (also known as gas fees) are determined. This allows Avalanche L1s to define the desired or maximal throughput of the blockchain differently.

To adjust the fee dynamics we have the following parameter:

Gas Limit: The total amount of gas that can be used in a single block. This impacts how much computation happens in one block. The value represents the maximum amount of gas a single transaction can use (which would result in a single transaction block).

Target Block Rate: The network aims to produce a new block in targetBlockRate seconds. This value is in seconds. If the network starts producing faster than this, base fees are increased accordingly. Otherwise, if the network starts producing slower than this, base fees are decreased accordingly.

Min. Base Fee: The minimum base fee that can be used by a transaction and the cost to do native token transfers. No matter how simple a transaction is, it will cost at least the minimum base fee.

Target Gas: The targeted amount of gas (including block gas cost) to consume within a rolling 10s window.

Base Fee Change Denominator: The transaction base fee changes with demand of the block space. If the parent block used more gas than its target, the base fee should increase. Otherwise, if the parent block used less gas than its target, the base fee should decrease by the amount. There is a formula behind this that would go beyond the scope of this section, but setting this value to a larger value means that the base fee will change more gradually. Setting it to a smaller value will make the base fee change more rapidly.

Min. Block Gas Cost: Minimum gas cost a block should cover.

Max. Block Gas cost: Maximum gas cost a block should cover.

Block Gas Cost Step: This value determines the block gas change rate depending on the targetBlockRate. If the parent block is produced at the targetBlockRate, the block gas cost will stay the same. If the parent block is produced at a slower rate, the block gas cost will decrease.