Dynamic Fee Structure

Definition ∞ A dynamic fee structure adjusts transaction costs based on current network conditions or other predefined parameters. This system permits fees to increase during periods of high network congestion to prioritize transactions, or decrease when network demand is low. The adjustment mechanism can be algorithmic, reacting to block space availability or oracle-reported metrics. It aims to optimize network throughput and resource allocation, ensuring efficient operation.
Context ∞ The implementation of dynamic fee structures seeks to balance network accessibility with validator compensation and network security. Debates often concern the fairness of fee distribution and the predictability of costs for users and developers. Future advancements focus on more sophisticated fee markets that reduce volatility and improve user experience.