Network Gas Fees & Priority Bidding (ETH & BTC)

1. What Are Gas and Mining Fees?

On public distributed ledger networks, blockspace is an inherently scarce computational resource. Every transaction—from a standard wallet-to-wallet transfer to a complex smart contract swap on an automated market maker (AMM)—consumes network computing power and validator storage. To prevent network spam, prioritize urgent executions, and incentivize decentralized node operators, networks implement dynamic market-driven fee mechanisms.

2. How Ethereum Gas Works: EIP-1559 Mechanics

Under Ethereum's London Hard Fork (EIP-1559), transaction fees are split into two distinct components:

• Base Fee (Burned): The minimum price per gas unit required for inclusion in a block. This fee is automatically burned (permanently removed from circulation), creating deflationary pressure on ETH supply during periods of high network congestion.
• Priority Fee / Tip (Paid to Validator): An optional additional fee paid directly to the block builder to incentivize instant transaction ordering.

For example, a standard ETH transfer consumes exactly 21,000 gas units. At a 3 Gwei base fee, the transfer costs less than $0.35 USD. However, executing a Uniswap V3 concentrated liquidity swap requires approximately 130,000 gas units, resulting in proportionally higher computational cost.

3. How Bitcoin Mining Fees Work: Sat/vB and the Mempool

Unlike Ethereum’s computational gas model, Bitcoin fees are determined strictly by transaction data size measured in virtual bytes (vB). Because Bitcoin blocks are constrained by a 4-megabyte weight limit, miners select pending transactions from the public mempool that pay the highest fee rate:

During periods of Ordinals inscriptions, Runes token minting, or macro market volatility, the Bitcoin mempool backs up, driving priority fee rates from baseline levels of 10–20 Sat/vB up to several hundred Sat/vB.