diff --git a/src/content/developers/docs/blocks/index.md b/src/content/developers/docs/blocks/index.md index 6e045c59ab3..dd2415ec041 100644 --- a/src/content/developers/docs/blocks/index.md +++ b/src/content/developers/docs/blocks/index.md @@ -44,18 +44,19 @@ Proof of work means the following: ## What's in a block? {#block-anatomy} -- Timestamp – the time when the block was mined. -- Block number – the length of the blockchain in blocks. -- Difficulty – the effort required to mine the block. -- mixHash – a unique identifier for that block. -- A parent hash – the unique identifier for the block that came before (this is how blocks are linked in a chain). -- Transactions list – the transactions included in the block. -- State root – the entire state of the system: account balances, contract storage, contract code and account nonces are inside. -- Nonce – a hash that, when combined with the mixHash, proves that the block has gone through [proof of work](/developers/docs/consensus-mechanisms/pow/). +- `timestamp` – the time when the block was mined. +- `blockNumber` – the length of the blockchain in blocks. +- `baseFeePerGas` - the minimum fee per gas required for a transaction to be included in the block. +- `difficulty` – the effort required to mine the block. +- `mixHash` – a unique identifier for that block. +- `parentHash` – the unique identifier for the block that came before (this is how blocks are linked in a chain). +- `transactions` – the transactions included in the block. +- `stateRoot` – the entire state of the system: account balances, contract storage, contract code and account nonces are inside. +- `nonce` – a hash that, when combined with the mixHash, proves that the block has gone through [proof of work](/developers/docs/consensus-mechanisms/pow/). ## Block size {#block-size} -A final important note is that blocks themselves are bounded in size. Each block has a block gas limit which is set by the network and the miners collectively: the total amount of gas expended by all transactions in the block must be less than the block gas limit. This is important because it ensures that blocks can’t be arbitrarily large. If blocks could be arbitrarily large, then less performant full nodes would gradually stop being able to keep up with the network due to space and speed requirements. The block gas limit at block 0 was initialized to 5,000; any miner who mines a new block can alter the gas limit by up to about 0.1% in either direction from the parent block gas limit. The gas limit as of April 2021 currently hovers around 15,000,000. +A final important note is that blocks themselves are bounded in size. Each block has a target size of 15 million gas but the size of blocks will increase or decrease in accordance with network demands, up until the block limit of 30 milion gas (2x target block size). The total amount of gas expended by all transactions in the block must be less than the block gas limit. This is important because it ensures that blocks can’t be arbitrarily large. If blocks could be arbitrarily large, then less performant full nodes would gradually stop being able to keep up with the network due to space and speed requirements. ## Further reading {#further-reading} diff --git a/src/content/developers/docs/gas/index.md b/src/content/developers/docs/gas/index.md index a05eeddf58e..bc4067caa51 100644 --- a/src/content/developers/docs/gas/index.md +++ b/src/content/developers/docs/gas/index.md @@ -3,7 +3,6 @@ title: Gas and fees description: lang: en sidebar: true -incomplete: true --- Gas is essential to the Ethereum network. It is the fuel that allows it to operate, in the same way that a car needs gasoline to run. @@ -21,88 +20,123 @@ Since each Ethereum transaction requires computational resources to execute, eac ![A diagram showing where gas is needed in EVM operations](./gas.png) _Diagram adapted from [Ethereum EVM illustrated](https://takenobu-hs.github.io/downloads/ethereum_evm_illustrated.pdf)_ -In essence, gas fees are paid in Ethereum's native currency, ether (ETH). Gas prices are denoted in gwei, which itself is a denomination of ETH - each gwei is equal to 0.000000001 ETH (10-9 ETH). For example, instead of saying that your gas costs 0.000000001 ether, you can say your gas costs 1 gwei. +Gas fees are paid in Ethereum's native currency, ether (ETH). Gas prices are denoted in gwei, which itself is a denomination of ETH - each gwei is equal to 0.000000001 ETH (10-9 ETH). For example, instead of saying that your gas costs 0.000000001 ether, you can say your gas costs 1 gwei. -Let's say Alice has to pay Bob 1ETH. +## Prior to the London upgrade {#pre-london} + +The way transaction fees on the Ethereum network are calculated changed during the London network upgrade. Here is a recap of how things used to work: + +Let's say Alice had to pay Bob 1 ETH. In the transaction the gas limit is 21,000 units and the gas price is 200 gwei. -Total fee will be: `Gas units (limit) * Gas price per unit` +Total fee would have been: `Gas units (limit) * Gas price per unit` i.e `21,000 * 200 = 4,200,000 gwei` or 0.0042 ETH -Now, when Alice sends the money, 1.0042 ETH will be deducted from Alice's account. -Bob will be credited 1.0000 ETH. -Miner gets 0.0042 ETH. +When Alice sent the money, 1.0042 ETH would be deducted from Alice's account. +Bob would be credited 1.0000 ETH. +Miner would receive 0.0042 ETH. This video offers a concise overview of gas and why it exists: -## Why do gas fees exist? {#why-do-gas-fees-exist} +## After the London Upgrade {#post-london} -In short, gas fees help keep the Ethereum network secure. By requiring a fee for every computation executed on the network, we prevent actors from spamming the network. In order to prevent accidental or hostile infinite loops or other computational wastage in code, each transaction is required to set a limit to how many computational steps of code execution it can use. The fundamental unit of computation is "gas". +[The London Upgrade](/history/#london) aims to make transacting on Ethereum more predictable for users by overhauling Ethereum's transaction-fee-mechanism. The high-level benefits introduced by this change include better transaction fee estimation, generally quicker transaction inclusion, and offsetting the ETH issuance by burning a percentage of transaction fees. -Although a transaction includes a limit, any gas not used in a transaction is returned to the user. +Starting with the London network upgrade, every block has a base fee, the minimum price per unit of gas for inclusion in this block, calculated by the network based on demand for block space. As the base fee of the transaction fee is burnt, users are also expected to set a tip (priority fee) in their transactions. The tip compensates miners for executing and propagating user transactions in blocks and is expected to be set automatically by most wallets. -![Diagram showing how unused gas is refunded](../transactions/gas-tx.png) -_Diagram adapted from [Ethereum EVM illustrated](https://takenobu-hs.github.io/downloads/ethereum_evm_illustrated.pdf)_ +Calculating the total transaction fee works as follows: `Gas units (limit) * (Base fee + Tip)` -## What is gas limit? {#what-is-gas-limit} +Let’s say Jordan has to pay Taylor 1 ETH. In the transaction the gas limit is 21,000 units and the base fee is 100 gwei. Jordan includes a tip of 10 gwei. -Gas limit refers to the maximum amount of gas you are willing to consume on a transaction. More complicated transactions, involving [smart contracts](/developers/docs/smart-contracts/), require more computational work so they require a higher gas limit than a simple payment. A standard ETH transfer requires a gas limit of 21,000 units of gas. +Using the formula above we can calculate this as `21,000 * (100 + 10) = 2,310,000 gwei` or 0.0023 ETH. -For example if you put a gas limit of 50,000 for a simple ETH transfer, the EVM would consume 21,000, and you would get back the remaining 29,000. However, if you specify too little gas say for example, a gas limit of 20,000 for a simple ETH transfer, the EVM will consume your 20,000 gas units attempting to fulfill the txn, but it will not complete. The EVM then reverts any changes, but since 20k gas units worth of work has already been done by the miner, that gas is consumed. +When Jordan sends the money, 1.0023 ETH will be deducted from Jordan's account. +Taylor will be credited 1.0000 ETH. +Miner receives the tip of 0.000195 ETH. +Base fee of 0.001953 ETH is burned. + +Additionally, Jordan can also set a max fee (`maxFeePerGas`) for the transaction. The difference between the max fee and the actual fee is refunded to Jordan, i.e. `refund = max fee - (base fee + priority fee)`. Jordan can set a maximum amount to pay for the transaction to execute and not worry about are overpaying "beyond" the base fee when the transaction is executed. + +### Block Size {#block-size} + +Before the London Upgrade, Ethereum had fixed-sized blocks. In times of high network demand, these blocks operated at total capacity. As a result, users often had to wait for high demand to reduce to get included in a block, which led to a poor user experience. + +The London Upgrade introduced variable-size blocks to Ethereum. Each block has a target size of 15 million gas but, the size of blocks will increase or decrease in accordance with network demand, up until the block limit of 30 million gas (2x the target block size). The protocol achieves an equilibrium block size of 15 million on average through the process of _tâtonnement_. This means if the block size is greater than the target block size, the protocol will increase the base fee for the following block. Similarly, the protocol will decrease the base fee if the block size is less than the target block size. The amount the base fee is adjusted by is proportional to how far from the current block size is from the target. [More on blocks](/developers/docs/blocks/). + +### Base Fee {#base-fee} + +Every block has a base fee which acts as a reserve price. To be eligible for inclusion in a block the offered price per gas must at least equal the base fee. The base fee is calculated independently of the current block and is instead determined by the blocks before it - making transaction fees more predictable for users. When the block is mined this base fee is "burned", removing it from circulation. + +The base fee is calculated by a formula that compares the size of the previous block (the amount of gas used for all the transactions) with the target size. The base fee will increase by a maximum of 12.5% per block if the target block size is exceeded. This exponential growth makes it economically non-viable for block size to remain high indefinitely. + +| Block Number | Included Gas | Fee Increase | Current Base Fee | +| ------------ | -----------: | -----------: | ---------------: | +| 1 | 15M | 0% | 100 gwei | +| 2 | 30M | 0% | 100 gwei | +| 3 | 30M | 12.5% | 112.5 gwei | +| 4 | 30M | 12.5% | 126.5 gwei | +| 5 | 30M | 12.5% | 142.4 gwei | +| 6 | 30M | 12.5% | 160.2 gwei | +| 7 | 30M | 12.5% | 180.2 gwei | +| 8 | 30M | 12.5% | 202.8 gwei | -## What is gas price? {#what-is-gas-price} +Relative to the pre-London gas auction market, this transaction-fee-mechanism change causes fee prediction to be more reliable. Following the table above - to create a transaction on block number 9, a wallet will let the user know with certainty that the **maximum base fee** to be added to the next block is `current base fee * 112.5%` or `202.8 gwei * 112.5% = 256.8 gwei`. -Gas price refers to the amount of Ether you are willing to pay for every unit of gas, and this is usually measured in 'gwei'. Prior to -[the London update](/history/#london), you specify in the transaction how much you are willing to pay per gas, and you pay exactly that amount. -Different transactions in the same block can have very different gas prices. +It's also important to note it is unlikely we will see extended spikes of full blocks because of the speed at which the base fee increases proceeding a full block. -### The London update {#gas-price-london-update} +| Block Number | Included Gas | Fee Increase | Current Base Fee | +| ------------ | -----------: | -----------: | ---------------: | +| 30 | 30M | 12.5% | 2705.6 gwei | +| ... | ... | 12.5% | ... | +| 50 | 30M | 12.5% | 28531.3 gwei | +| ... | ... | 12.5% | ... | +| 100 | 30M | 12.5% | 10302608.57 gwei | -Starting with the London update, every block has a base fee, the minimum per gas price for inclusion in this block. The base fee is calculated by a formula -that compares the size of the previous block (the amount of gas used for all the transactions) with a target size. This upgrade will double the allowable block size, while targeting blocks to be 50% full. If the block size is higher than the target, there is more demand for inclusion in the blockchain than targeted supply, so the base fee in the subsequent block is increased. If the block size is lower than the target then there is less demand for block space than targeted supply, so the base fee is subsequently decreased. The amount the base fee is adjusted by is proportional to how far from the target the block size is. This base fee is "burned", removing it from circulation. +### Priority Fee (Tips) {#priority-fee} -Transactions can either specify a gas price using the old mechanism, or specify two other parameters: +Before the London Upgrade, miners would receive the total gas fee from any transaction included in a block. -- Maximum Fee per Gas: The maximum gas price the transaction can be charged. -- Maximum Priority Fee per Gas (a.k.a. Tip): The maximum priority fee the transaction signer is willing to pay the miner per gas to be included. - If the base fee plus this amount is less than the maximum fee per gas, this is the priority fee. Otherwise, the priority fee is the maximum - fee minus the base fee. +With the new base fee getting burned, the London Upgrade introduced a priority fee (tip) to incentivize miners to include a transaction in the block. Without tips, miners would find it economically viable to mine empty blocks, as they would receive the same block reward. Under normal conditions, a small tip provides miners a minimal incentive to include a transaction. For transactions that need to get preferentially executed ahead of other transactions in the same block, a higher tip will be necessary to attempt to outbid competing transactions. -For example, imagine a block with a base fee of 100 gwei. The pool of available transactions contains the transactions -in the table below. Transactions A-C are type 2, so they include both a maximum fee per gas and a maximum priority fee per gas. -Transaction D is an older transaction type (either 0, without an access list, or 1, which does have an access list), so it only specifies -a gas price. That gas price is used for both maximum fee per gas and maximum priority fee per gas. +### Max Fee {#maxfee} -| ID | Maximum Fee per Gas | Maximum Priority Fee per Gas | Actual Priority Fee | Actual Gas Price | Remarks | -| --- | ------------------: | ---------------------------: | ------------------: | ---------------: | --------------------------------------------------------------- | -| A | 90 gwei | 90 gwei | N/A | N/A | This transaction is not going in the block | -| B | 200 gwei | 5 gwei | 5 gwei | 105 gwei | The priority fee is the maximum priority fee | -| C | 120 gwei | 30 gwei | 20 gwei | 120 gwei | The priority fee is the maximum (total) fee minus the base fee | -| D | 200 gwei | 200 gwei | 100 gwei | 200 gwei | Transactions that specify gas price are charged the full amount | +To execute a transaction on the network users are able to specify a maximum limit they are willing to pay for their transaction to be executed. This optional parameter is known as the `maxFeePerGas`. In order for a transaction to be executed the max fee must exceed the sum of the base fee and the tip. The transaction sender is refunded the difference between the max fee and the sum of the base fee and tip. -Miners and validators are expected to choose the transactions that will pay them the highest priority fees. +## EIP-1559 {#eip-1559} -This mechanism is more complicated than the simple gas price auction, but it has the advantage of making gas fees more predictable, as well as making ETH more -valuable by removing some of it from circulation. The maximum fee per gas functions as a [second price auction](https://oko.uk/blog/first-price-vs-second-price-auctions), -which is more efficient than the previous mechanism that is a first price auction. Users can submit transactions with a much higher maximum fee per gas, corresponding -to how much they need the transaction to happen, without having to worry that they will be overcharged. +The implementation of [EIP-1559](https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md) in the London Upgrade makes the transaction fee mechanism more complex than the current gas price auction, but it has the advantage of making gas fees more predictable, resulting in a more efficient transaction fee market. Users can submit transactions with a `maxFeePerGas` corresponding to how much they are willing to pay for the transaction to be executing, knowing that they will not pay more than the market price for gas (`baseFeePerGas`), and get any extra, minus their tip, refunded. + +This video explains EIP-1559 and the benefits it brings: + + If you are interested you can read the exact [EIP-1559 specifications](https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md). Continue down the rabbit hole with these [EIP-1559 Resources](https://hackmd.io/@timbeiko/1559-resources). -## Why can gas fees get so high? {#why-can-gas-fees-get-so-high} +## Why do gas fees exist? {#why-do-gas-fees-exist} -High gas fees are due to the popularity of Ethereum. Performing any operation on Ethereum requires consuming gas, and gas space is limited per block. This includes calculations, storing or manipulating data, or transferring tokens, each consuming different amounts of "gas" units. As dapp functionality grows more complex, the number of operations a smart contract performs grows too, meaning each transaction takes up more space of a limited size block. If there's too much demand, users must offer a higher gas price to try and out-bid other users' transactions. A higher price can make it more likely that your transaction will get into the next block. +In short, gas fees help keep the Ethereum network secure. By requiring a fee for every computation executed on the network, we prevent bad actors from spamming the network. In order to prevent accidental or hostile infinite loops or other computational wastage in code, each transaction is required to set a limit to how many computational steps of code execution it can use. The fundamental unit of computation is "gas". + +Although a transaction includes a limit, any gas not used in a transaction is returned to the user (i.e `max fee - (base fee + tip)` is returned). + +![Diagram showing how unused gas is refunded](../transactions/gas-tx.png) +_Diagram adapted from [Ethereum EVM illustrated](https://takenobu-hs.github.io/downloads/ethereum_evm_illustrated.pdf)_ -Gas price alone does not actually determine how much we have to pay for a particular transaction. To calculate the transaction fee we have to multiply the gas used by gas price, which is measured in gwei. +## What is gas limit? {#what-is-gas-limit} + +Gas limit refers to the maximum amount of gas you are willing to consume on a transaction. More complicated transactions, involving [smart contracts](/developers/docs/smart-contracts/), require more computational work so they require a higher gas limit than a simple payment. A standard ETH transfer requires a gas limit of 21,000 units of gas. + +For example if you put a gas limit of 50,000 for a simple ETH transfer, the EVM would consume 21,000, and you would get back the remaining 29,000. However, if you specify too little gas say for example, a gas limit of 20,000 for a simple ETH transfer, the EVM will consume your 20,000 gas units attempting to fulfill the txn, but it will not complete. The EVM then reverts any changes, but since 20k gas units worth of work has already been done by the miner, that gas is consumed. + +## Why can gas fees get so high? {#why-can-gas-fees-get-so-high} -This video about gas fees explains fully why fees can be so expensive: +High gas fees are due to the popularity of Ethereum. Performing any operation on Ethereum requires consuming gas, and gas space is limited per block. This includes calculations, storing or manipulating data, or transferring tokens, each consuming different amounts of "gas" units. As dapp functionality grows more complex, the number of operations a smart contract performs grows too, meaning each transaction takes up more space of a limited size block. If there's too much demand, users must offer a higher tip amount to try and out-bid other users' transactions. A higher tip can make it more likely that your transaction will get into the next block. - +Gas price alone does not actually determine how much we have to pay for a particular transaction. To calculate the transaction fee we have to multiply the gas used by the transaction fee, which is measured in gwei. ## Initiatives to reduce gas costs {#initiatives-to-reduce-gas-costs} @@ -116,7 +150,7 @@ Anyone with at least 32 ETH is able to stake them and become a validator respons ## Strategies for you to reduce gas costs {#strategies-for-you-to-reduce-gas-costs} -If you are looking to reduce gas costs for your ETH you are able to set the price of your own gas fees and choose the priority level of your transaction. Miners will 'work on' and execute transactions that offer a higher gas price, as they get to keep the fees that you pay and will be less inclined to execute transactions with lower gas fees set. The gas price you set is how much you are willing to pay per unit of gas. However if you set the amount of gas too low you will not be able to send your ETH as you will run out of gas, you would then have to resubmit your transaction costing you more in gas fees. You can do this from some wallet providers when sending ETH. +If you are looking to reduce gas costs for your ETH you are able to set a tip to indicate the priority level of your transaction. Miners will 'work on' and execute transactions that offer a higher tip per gas, as they get to keep the tips that you pay and will be less inclined to execute transactions with lower tips set. If you want to monitor gas prices so you are able to send your ETH for less you can use many different tools such as: @@ -125,7 +159,6 @@ If you want to monitor gas prices so you are able to send your ETH for less you ## Further Reading {#further-reading} -- [Understanding Ethereum Gas, Blocks and the Fee Market](https://medium.com/@eric.conner/understanding-ethereum-gas-blocks-and-the-fee-market-d5e268bf0a0e) - [Ethereum Gas Explained](https://defiprime.com/gas) - [Is Ethereum more expensive to use as price rises?](https://docs.ethhub.io/questions-about-ethereum/is-ethereum-more-expensive-to-use-as-price-rises/) - [Reducing the gas consumption of your Smart Contracts](https://medium.com/coinmonks/8-ways-of-reducing-the-gas-consumption-of-your-smart-contracts-9a506b339c0a) diff --git a/src/content/developers/docs/transactions/index.md b/src/content/developers/docs/transactions/index.md index 43fe31f11be..b42c9db9c3b 100644 --- a/src/content/developers/docs/transactions/index.md +++ b/src/content/developers/docs/transactions/index.md @@ -33,9 +33,10 @@ A submitted transaction includes the following information: - `value` – amount of ETH to transfer from sender to recipient (in WEI, a denomination of ETH) - `data` – optional field to include arbitrary data - `gasLimit` – the maximum amount of gas units that can be consumed by the transaction. Units of gas represent computational steps -- `gasPrice` – the fee the sender pays per unit of gas +- `maxPriorityFeePerGas` - the maximum amount of gas to be included as a tip to the miner +- `maxFeePerGas` - the maximum amount of gas willing to be paid for the transaction (inclusive of `baseFeePerGas` and `maxPriorityFeePerGas`) -Gas is a reference to the computation required to process the transaction by a miner. Users have to pay a fee for this computation. The `gasLimit` and `gasPrice` determine the maximum transaction fee paid to the miner. [More on Gas](/developers/docs/gas/). +Gas is a reference to the computation required to process the transaction by a miner. Users have to pay a fee for this computation. The `gasLimit`, and `maxPriorityFeePerGas` determine the maximum transaction fee paid to the miner. [More on Gas](/developers/docs/gas/). The transaction object will look a little like this: @@ -44,7 +45,8 @@ The transaction object will look a little like this: from: "0xEA674fdDe714fd979de3EdF0F56AA9716B898ec8", to: "0xac03bb73b6a9e108530aff4df5077c2b3d481e5a", gasLimit: "21000", - gasPrice: "200", + maxFeePerGas: "300" + maxPriorityFeePerGas: "10" nonce: "0", value: "10000000000", } @@ -65,7 +67,8 @@ Example [JSON-RPC](https://eth.wiki/json-rpc/API) call: { "from": "0x1923f626bb8dc025849e00f99c25fe2b2f7fb0db", "gas": "0x55555", - "gasPrice": "0x1234", + "maxFeePerGas": "0x1234", + "maxPriorityFeePerGas": "0x1234", "input": "0xabcd", "nonce": "0x0", "to": "0x07a565b7ed7d7a678680a4c162885bedbb695fe0", @@ -85,7 +88,8 @@ Example response: "raw": "0xf88380018203339407a565b7ed7d7a678680a4c162885bedbb695fe080a44401a6e4000000000000000000000000000000000000000000000000000000000000001226a0223a7c9bcf5531c99be5ea7082183816eb20cfe0bbc322e97cc5c7f71ab8b20ea02aadee6b34b45bb15bc42d9c09de4a6754e7000908da72d48cc7704971491663", "tx": { "nonce": "0x0", - "gasPrice": "0x1234", + "maxFeePerGas": "0x1234", + "maxPriorityFeePerGas": "0x1234", "gas": "0x55555", "to": "0x07a565b7ed7d7a678680a4c162885bedbb695fe0", "value": "0x1234", @@ -108,10 +112,10 @@ With the signature hash, the transaction can be cryptographically proven that it As mentioned, transactions cost [gas](/developers/docs/gas/) to execute. Simple transfer transactions require 21000 units of Gas. -So for Bob to send Alice 1 ETH at a `gasPrice` of 200 gwei, Bob will need to pay the following fee: +So for Bob to send Alice 1 ETH at a `baseFeePerGas` of 190 gwei and `maxPriorityFeePerGas` of 10 gwei, Bob will need to pay the following fee: ``` -200 * 21000 = 4,200,000 gwei +(190 + 10) * 21000 = 4,200,000 gwei --or-- 0.0042 ETH ``` @@ -120,7 +124,9 @@ Bob's account will be debited **-1.0042 ETH** Alice's account will be credited **+1.0 ETH** -The miner processing the transaction will get **+0.0042 ETH** +The base fee will be burned **-0.003735 ETH** + +Miner keeps the tip **+0.000197 ETH** Gas is required for any smart contract interaction too. @@ -137,7 +143,7 @@ Once the transaction has been submitted the following happens: `0x97d99bc7729211111a21b12c933c949d4f31684f1d6954ff477d0477538ff017` 2. The transaction is then broadcast to the network and included in a pool with lots of other transactions. 3. A miner must pick your transaction and include it in a block in order to verify the transaction and consider it "successful". - - You may end up waiting at this stage if the network is busy and miners aren't able to keep up. Miners will always prioritise transactions with higher `GASPRICE` because they get to keep the fees. + - You may end up waiting at this stage if the network is busy and miners aren't able to keep up. 4. Your transaction will also get a block confirmation number. This is the number of blocks created since the block that your transaction was included in. The higher the number, the greater the certainty that the transaction was processed and recognised by the network. This is because sometimes the block your transaction was included in may not have made it into the chain. - The larger the block confirmation number the more immutable the transaction is. So for higher value transactions, more block confirmations may be desired.