Protocol fees are charges levied for the use of specific functions or services within a decentralized network or application. These fees compensate network participants for their contributions, such as transaction validation or data storage, and can also serve to manage network congestion. They are an integral part of the economic model of many blockchain-based systems.
Context
Discussions around protocol fees in cryptocurrency news often focus on their impact on transaction costs, network usability, and the economic incentives for validators or miners. Changes in fee structures, such as gas fees on Ethereum, are closely scrutinized for their influence on user adoption and the overall cost-effectiveness of decentralized applications.
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