From 8f7395bfc2cda22e3e1f314932fb90481c719d40 Mon Sep 17 00:00:00 2001 From: Meshach Date: Sun, 6 Jul 2025 11:05:37 +0100 Subject: [PATCH 1/2] Create Gas_and_Fees_Akomaye Meshach.adoc --- Gas_and_Fees_Akomaye Meshach.adoc | 1 + 1 file changed, 1 insertion(+) create mode 100644 Gas_and_Fees_Akomaye Meshach.adoc diff --git a/Gas_and_Fees_Akomaye Meshach.adoc b/Gas_and_Fees_Akomaye Meshach.adoc new file mode 100644 index 0000000..8b13789 --- /dev/null +++ b/Gas_and_Fees_Akomaye Meshach.adoc @@ -0,0 +1 @@ + From 88ce7dc2ea2cfdbedf44cf4288d8e611b3771482 Mon Sep 17 00:00:00 2001 From: Meshach Date: Mon, 7 Jul 2025 15:39:50 +0100 Subject: [PATCH 2/2] Update Gas_and_Fees_Akomaye_Meshach.adoc Assignment on What is gas fees What is EIP1559 What is slippage --- Gas_and_Fees_Akomaye Meshach.adoc | 62 +++++++++++++++++++++++++++++++ 1 file changed, 62 insertions(+) diff --git a/Gas_and_Fees_Akomaye Meshach.adoc b/Gas_and_Fees_Akomaye Meshach.adoc index 8b13789..e69dd05 100644 --- a/Gas_and_Fees_Akomaye Meshach.adoc +++ b/Gas_and_Fees_Akomaye Meshach.adoc @@ -1 +1,63 @@ +# What the Hell is Gas Fee and Why Should I Care? + +Think of **gas fee** as a **transaction fee** on the blockchain. It's paid in every transaction you make and goes to **validators** or **miners** to keep the blockchain **secure** and **decentralized**. + +--- + +## Who are Validators / Miners? + +**Validators** or **miners** are people who **validate every transaction** on the blockchain. They ensure that the chain remains **secure** and **decentralized**. + +--- + +## Why Should I Pay Them My Money? + +There are two major types of consensus mechanisms: + +1. **Proof of Work (PoW):** + - Validators (miners) use **computational power/energy** to solve complex mathematical problems (cryptography). + - This process validates transactions and includes them in blocks. + +2. **Proof of Stake (PoS):** + - Validators **stake their tokens** in the blockchain. + - They use computational resources to validate transactions. + +In both systems, **validating transactions is resource-intensive**. The **gas fee** is your way of **thanking them** and **paying for the infrastructure** that keeps the blockchain running. + +In some blockchains, gas fees are not just for validator rewards—they're also used to **maintain the security and operations** of the network. + +--- + +## What is EIP-1559 and Why Should I Care? + +Once upon a time, the Ethereum chain became **congested**—too many people making transactions at the same time, like a **traffic jam**. + +During this period, validators prioritized transactions based on how **high** the gas fee was. Some users ended up paying **2–3x** their transaction value just to get included. + +To solve this, Ethereum introduced **EIP-1559**, which added two key concepts: + +### 🔹 Base Fee +- This is the **minimum fee** for a transaction. +- It's **adjusted based on network congestion**. +- Over time, base fees are **burned**, reducing ETH supply. + +### 🔹 Priority Fee (Tip) +- A small **tip to validators**. +- Think of it as a **thank you message sent in advance** to prioritize your transaction. + +--- + +## What is Slippage and Why Should I Care? + +**Slippage** is your **risk tolerance** for **price changes** during a volatile market. + +Example: +- You're buying a token at **$1 each** and want to spend **$100**. +- But the token price is **volatile**. +- You set your **slippage to 2%**, meaning you're okay with the price going slightly down or up. +- If the price rises, you may end up with **98 tokens** instead of 100. + +Setting slippage protects you from **failed transactions** but also determines **how much price movement you're willing to accept**. + +---