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Payments & Banking Technical Explainer

What is a network fee?

A network fee is the cost of having a blockchain transaction processed under that network's rules. It is normally separate from value delivered to the destination and from provider service charges.

Fee asset and transfer asset can differ

Miners, validators or another network mechanism receive fees, depending on the system. Demand, transaction complexity and urgency can affect cost. A token transfer may pay its fee in the host chain's native asset.

High or low fees do not by themselves establish importance, concealment or criminality.

Reconcile each component

Record hash, network, transferred asset and amount, on-chain fee, provider charge and conversion separately. Ask an exchange or wallet to distinguish withdrawal and service fees from the blockchain cost.

This prevents sender cost from being confused with recipient value and can help reconcile provider and network records. The fee does not identify the person authorising the transaction.

The point to remember

Keep network fee, provider charges and recipient value separate so the transaction is quantified and reconciled correctly.

Reference: PAY-164Payments & Banking