FOUNDATIONAL TECHNOLOGY

Gas Fee

The fee paid by users to compensate network validators for processing and recording transactions on a blockchain, priced in the network’s native token. High gas fees on congested networks have accelerated institutional adoption of Layer 2 solutions.

EXAMPLE

Ethereum mainnet gas fees reaching $50 per transaction during peak periods drove institutional payment developers to Layer 2 networks with sub-cent transaction costs.

Relevant Roles and Functions

On-chain Role
Smart Contract Risk & Architecture Lead
Function
Integration with Bank Systems
Operational Resiliency
Reviewing Smart Contract Design
TradFi Equivalent
Core Banking Architecture
Distributed Systems
Payments Infrastructure
Technology

Related Terms

Blockchain

A distributed, immutable ledger that records transactions across a network of computers in cryptographically linked blocks, providing a shared and tamper-resistant source of truth across multiple parties.

Example

By settling trades on blockchain, two counterparties share an identical, real-time record without requiring a central reconciliation agent.

Settlement Finality

The point at which a transaction is irrevocably complete and the transferred assets are unconditionally owned by the recipient. On-chain systems can achieve near-instant finality, replacing the deferred finality of traditional clearinghouses.

Example

On-chain settlement finality eliminates the intraday credit exposures that central counterparties currently absorb on behalf of clearing members.