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= Gas and Fees
:last-update: February 25, 2025
:icons: font
:source-highlighter: rouge
:toc: left
:toclevels: 2

== What is Gas?

Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network.

Since each Ethereum transaction requires computational resources, these must be paid for to prevent spam and infinite loops. Payment is made in the form of a *gas fee*, which is paid regardless of whether a transaction succeeds or fails.

[NOTE]
====
- Gas fees are paid in ETH, typically quoted in **gwei** (1 gwei = 0.000000001 ETH).
- The smallest unit of ETH is **wei** (1 gwei = 1 billion wei).
====

image::gas-evm-diagram.png[Diagram of Gas in EVM Operations,align="center"]

== How are Gas Fees Calculated?

The total gas fee has two components:

1. *Base Fee*: Set by the protocol (burned after the transaction).
2. *Priority Fee (Tip)*: Paid to validators to incentivize transaction inclusion.

=== Formula
[source,text]
----
Total Fee = Gas Used × (Base Fee + Priority Fee)
----

=== Example
Jordan sends Taylor 1 ETH:
- Gas used: 21,000 units
- Base fee: 10 gwei
- Priority fee: 2 gwei

Calculation:
[source,text]
----
21,000 × (10 + 2) = 252,000 gwei (0.000252 ETH)
----

- **Taylor receives**: 1.0000 ETH
- **Validator tip**: 0.000042 ETH
- **Base fee burned**: 0.00021 ETH

== Base Fee Mechanics

- Adjusted per block based on demand (target block size = 15M gas, max = 30M gas).
- Increases by up to *12.5%* if the previous block exceeded the target.

.Block Base Fee Example
[cols="1,1,1,1"]
|===
| 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
|===

== Priority Fee (Tip)

- Encourages validators to include transactions.
- Higher tips = faster inclusion.

== Max Fee (`maxFeePerGas`)

- The maximum a user is willing to pay per gas.
- Refunded amount: `maxFeePerGas - (base fee + tip)`.

== Gas Limit

- Maximum gas a transaction can consume.
- **Standard ETH transfer**: 21,000 gas.
- Unused gas is refunded; insufficient gas fails the transaction.

== Why Gas Fees Get High

- High demand → Users bid higher tips.
- Complex smart contracts consume more gas.

== Reducing Gas Costs

- **Layer 2 solutions** (e.g., Arbitrum, Optimism).
- **Ethereum scalability upgrades** (e.g., sharding).

== Monitoring Tools

- https://etherscan.io/gastracker[Etherscan Gas Tracker]
- https://ethgasstation.info[ETH Gas Station]
- https://www.blocknative.com/gas-estimator[Blocknative Estimator]

== Further Reading

- link:https://ethereum.org/en/developers/docs/gas/[Ethereum Gas Docs]
- link:https://soliditylang.org/[Solidity Documentation]

Key Features:

  1. Structured for AsciiDoc: Uses tables, code blocks, and cross-references.

  2. Visual Aids: Placeholder for a gas/EVM diagram (replace gas-evm-diagram.png).

  3. Examples: Clear calculations and block fee tables.

  4. External Links: Integrates Ethereum resources.

Save this as chapter1.adoc and compile with AsciiDoctor (e.g., asciidoctor chapter1.adoc). Let me know if you need adjustments!