Tax & Fees

Transactions on Terp Network require fees to compensate validators for computational resources. Fees are denominated in uthiol.

Gas

Every transaction consumes gas proportional to the computational work required. Each operation in the Cosmos SDK and CosmWasm contract execution has an associated gas cost.

# Estimate gas for a transaction
terpd tx bank send <from> <to> 1000000uthiol --dry-run

Gas Components

• Base fee — overhead per transaction
• Contract execution — CosmWasm VM gas (instructions, storage reads/writes)
• Storage — KV store writes
• IBC — packet submission and acknowledgement

Minimum Fee

Terp Network uses the x/globalfee module to enforce a minimum gas fee. All transactions must specify a gas price at or above this minimum:

Minimum gas price: 0.05uthiol

Transaction fee = gas limit × gas price. A transaction with gas_limit = 200000 and gas_price = 0.05uthiol costs 10000uthiol.

Fee comparison visualizer scaffold — an interactive component that lets users input a transaction type (simple send, contract execute, IBC transfer) and see estimated gas costs with current minimum fee.

Fee Types

Fee Market Dynamics

Unlike Ethereum's EIP-1559, Terp Network uses a minimum fee floor rather than a dynamic fee market. Validators prioritize transactions with higher fees when the mempool is congested.

Fee Grants

The x/feegrant module allows one account to grant fee allowances to another. This enables:

• Sponsored transactions — dApps pay user fees
• Gas station wallets — pre-funded fee allowance for onboarding
• Delegated fee payment — smart contracts pay fees on behalf of users

# Grant fee allowance
terpd tx feegrant grant <grantor> <grantee> \
  --spend-limit=1000000uthiol

FeeShare

The x/feeshare module shares contract execution fees with smart contract developers. When a user executes a contract, a portion of the fee goes to the developer's registered address.

Fee flow diagram scaffold — a visual showing how fees flow from user through gas consumption to validators, with FeeShare splitting to developers and FeeGrant redirecting from sponsors.

Economic Sustainability

Fee mechanisms serve multiple purposes:

1. DoS protection — prevents spam by making each tx cost something
2. Validator compensation — fees add to block rewards
3. Resource accounting — gas metering prevents runaway computation
4. Developer incentives — FeeShare rewards contract development

Further Reading

• Global fee module — detailed configuration
• Fee grant guide — setting up fee allowances
• FeeShare guide — register for fee sharing