---
# System prepended metadata

title: Blockchain fees
tags: [' fees', Train & Talk]

---

---
tags: Train & Talk, fees
---

# Blockchain fees

## What are blockchain fees?

Blockchain fees are an amount that is added to any operation. This amount is paid to the block proposer. This mean that the person who has operations want their operations get included in the block by paying a reasonable fee for a block proposer. It is because blocks have limited gas, and so block proposers need to pick which operations will be included among a big pool of operations.

Standard economics is perform an auction everyone attaches a fee to their operation and block proposers pick the operations in decreasing fee order.

Let's take a contract call on Tezos blockchain. The column "Operation costs"[^1], at the "Baker fee" , the amount "0.009XTZ" is the fees that the block proposer will receive when successfully include the operation into block.

![](https://hackmd.io/_uploads/r1navut75.png)

[^1]: The "Storage fee" and "Allocation fee" are referred to as burn as they are not sent to anyone

## What are gas fees?

**Example 1**

Assume that there is a limit of 100.000 gas per block, it means that you can only include:
   - 50 operations that each consume 2.000 gas or 
   - a 1.000 operations that each consume 100 gas. 

Assume that all operations have a fee of 1 XTZ, as a block proposer you will prefer the latter ones. Block proposers (bakers) prefer either operations with bigger fees (they can earn more money) or smaller gas consumption (so they can include more of them).
    
   This is the reason why fees end up proportional to gas and are sometimes called gas fees.

**Example 2**

Let's take another example of Optimistic Rollups (ORUs). With ORUs basically, there is no gas limit on chain. The limit becomes the size each operation takes. With ORUs the fee is completely disconnected from the gas an operation takes, the fee is instead proportional to the size of the operation.


## Fees on Tezos blockchain[^2]

The required fees per operation is following by:

```
fees in mutez >= 
minimal_fees_mutez +
minimal_nanotez_per_bytes_mutez * size +
minimal_nanotez_per_gas_unit_mutez * gas
```

The minimal fee variable can be set by each baker, but the default values are:

```
minimal_fees_mutez = 100
minimal_nanotez_per_bytes_mutez = 1
minimal_nanotez_per_gas_unit_mutez = 0.1
```

Note that: $1$ tez = $10^6$ mutez = $10^9$ nanotez.

[^2]: [Fee schedule](https://tezosguides.com/wallet_integration/basics/fee_schedule/)

Assuming most bakers will use the default fee settings and the blocks are not being full:

| Operation     | Fee      |
| ------------- | -------- |
| Transaction   | 0.001350 |
| Origination   | 0.001300 |
| Delegation    | 0.001300 |
| Reveal        | 0.001300 |


## References

[Economics and rewards](https://opentezos.com/tezos-basics/economics-and-rewards/)
[Tezos how to use guide](http://tezos.gitlab.io/introduction/howtouse.html)
[Gas & Fee](https://kitchen.stove-labs.com/docs/knowledge/tezos_protocol/operations/gas-fees/)