> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cosmos.network/llms.txt
> Use this file to discover all available pages before exploring further.

# Gas and Fees

> Fee calculation and gas metering in Cosmos EVM

Cosmos EVM implements Ethereum-type fee calculation compatible with the Cosmos SDK. This overview explains gas calculation, fee provision, and how the fee market (EIP-1559) prioritizes transactions.

**References**: [Cosmos SDK Gas](/sdk/latest/learn/concepts/context-gas-events), [Ethereum Gas](https://ethereum.org/en/developers/docs/gas/)

## Gas and Fees Fundamentals

**Gas** is a unit measuring computational intensity of a transaction - the work required to execute it. Complex, multi-step transactions require more gas than simple transfers.

**Fees** are the cost paid for gas:

```
Total Fees = Gas × Gas Price
```

## Fee Handling

### Cosmos SDK Fees

Users specify two fields:

1. `GasLimit` - upper bound on execution gas (`GasWanted`)
2. One of `Fees` or `GasPrice` to specify or calculate transaction fees

The node consumes fees entirely, then executes the transaction. If `GasLimit` is insufficient, the transaction fails and rolls back without refunding fees.

Validators specify their `min-gas-prices` for transaction selection. Transactions with insufficient fees encounter delays or fail.

### Ethereum Fees (EIP-1559)

With EIP-1559 (London Hard Fork), `GasPrice` split into two components:

```
Gas Price = Base Fee + Priority Fee
```

* **BaseFee**: Calculated automatically based on block size (burned on Ethereum, distributed on Cosmos EVM)
* **PriorityFee**: Tip to proposer for transaction inclusion

Users specify:

* `max_fee_per_gas`: Total `GasPrice` maximum
* `max_priority_fee_per_gas`: Maximum `PriorityFee`
* `gas_limit`: Gas consumption limit

Surplus gas not required for execution is refunded.

**Reference**: [EIP-1559](https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md)

## Cosmos EVM Implementation

Fundamentally, Cosmos EVM is a Cosmos SDK chain enabling EVM compatibility via a module. All EVM transactions are encoded as Cosmos SDK transactions and update Cosmos SDK-managed state.

### Fee Market Module

Supports EIP-1559 gas calculation on the EVM layer:

* Tracks gas supplied per block to calculate base fee for future transactions
* For EVM transactions, bypasses local `min-gas-prices` and applies EIP-1559 fee logic
* Gas price must exceed both global `min-gas-price` and block's `BaseFee`

**Key differences from Ethereum**:

* `BaseFee` is distributed to validators/delegators (not burned)
* `BaseFee` is lower-bounded by global `min-gas-price` (currently zero, adjustable via governance)

### EVM Gas Refunds

Cosmos EVM refunds a fraction (at least 50% by default) of unused gas for EVM transactions to approximate Ethereum behavior. This is adjustable.

## Block Processing Timeline

1. **EndBlock**: FeeMarket module tracks total `TransientGasWanted` from block transactions for next block's `BaseFee`
2. **Transaction Reception**: Nodes receive and gossip transactions, prioritized by fee price
3. **BeginBlock**:
   * FeeMarket calculates `BaseFee` ([code](https://github.com/cosmos/evm/blob/main/x/feemarket/keeper/abci.go)) using previous block's `GasWanted`
   * Distribution module distributes previous block's fee rewards
4. **Transaction Processing**:
   * `AnteHandler` validates transaction, verifies fees > minimum values and `BaseFee`, deducts fees to `fee_collector` module
   * For Cosmos transactions: Execute and consume gas
   * For Ethereum transactions: Execute with gas isolation, calculate gas used, refund surplus
5. **EndBlock**: Store block's `GasWanted` for next block

## Gas Mechanics

### Cosmos Gas Metering

* `GasMeter`: Tracks gas consumed during state transitions (reset per transaction)
* `BlockGasMeter`: Tracks gas consumed in block, enforces predefined limit (set via governance)

Gas is priced per-byte. Since Cosmos uses [Big.Int](https://pkg.go.dev/math/big#Int) types (dynamically sized), larger parameter values are more gas-intensive than smaller ones.

### Matching EVM Gas Consumption

The EVM uses a [gas table](https://github.com/ethereum/go-ethereum/blob/master/params/protocol_params.go) for each OPCODE, whereas Cosmos uses a `GasConfig` with flat and per-byte costs for database operations.

To match EVM gas consumption, Cosmos EVM:

* Ignores SDK gas consumption logic
* Calculates gas consumed by subtracting EVM leftover gas + refund from gas limit
* Resets transaction `GasMeter` to 0 and manually sets it to `gasUsed` value from EVM execution

**Implementation**: [`x/vm/keeper/state_transition.go`](https://github.com/cosmos/evm/blob/main/x/vm/keeper/state_transition.go)

### AnteHandler

Performs basic checks before transaction execution:

* Signature verification, transaction field validation, transaction fees
* Verifies user has sufficient balance for tx cost (amount + fees)
* Checks gas limit >= computed intrinsic gas

### Gas Estimation

Ethereum's `eth_estimateGas` is implemented via `EstimateGas` query API. It:

* Applies transaction against current block/state
* Performs binary search to find optimal gas value
* Uses cache context to avoid persisting state changes

**Implementation**: [`x/vm/keeper/grpc_query.go`](https://github.com/cosmos/evm/blob/main/x/vm/keeper/grpc_query.go)

For Cosmos transactions, use [transaction simulation](/sdk/latest/node/txs#simulating-a-transaction).

### Zero-Fee Transactions

In Cosmos, minimum gas price is not enforced by `AnteHandler` - validators specify their own `min-gas-prices`. This allows 0-fee transactions for non-EVM transactions if validators accept them.

EVM transactions cannot have 0 fees as gas is inherently required by the EVM (validated in `ValidateBasic` and custom `AnteHandler`).

### Cross-Chain Gas and Fees

For cross-chain scenarios (e.g., IBC transfer from Chain A to Cosmos EVM without native tokens), Cosmos SDK `Tips` allow users to:

* Sign transaction with tip and no fees
* Send to fee relayer who covers fees in native currency
* Receive tip in payment (intermediary exchange behavior)

## Related Documentation

* [EIP-1559 Fee Market](/evm/next/documentation/concepts/eip-1559-feemarket) - Detailed fee market mechanics
* [Performance Optimization](/evm/v0.5.0/documentation/concepts/performance) - Gas estimation optimizations
* [x/feemarket Module](/evm/next/documentation/cosmos-sdk/modules/feemarket) - Fee market implementation