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Network Fee Meaning

A network fee (often called Gas on Ethereum) is the cost a user pays to the blockchain validators to process a transaction. It serves two vital functions.

First, it compensates the miners/validators for the hardware and electricity costs required to secure the network. Second, and perhaps more importantly, it prevents "Spam." If transactions were free, a malicious actor could send millions of useless transactions to clog up the network indefinitely.

By attaching a cost to every action, the protocol ensures that network resources are priced efficiently. Network fees are usually dynamic.

On Ethereum, following the EIP-1559 upgrade, the fee is split into a "Base Fee" (which is burned/destroyed, reducing supply) and a "Priority Fee" (which goes to the validator). This means that using the network actually reduces the inflation of the currency, aligning the incentives of token holders with the usage of the platform.

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Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

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