Overview
A priority fee, also known as a tip, is an optional amount added to the base fee to incentivize validators to include a transaction sooner. It goes to the block producer. It lets users compete for faster confirmation.
How It Works
After EIP-1559, users specify a max fee and a priority fee. The priority fee is what validators keep, so higher tips attract earlier inclusion. Users balance speed against cost.
Why It Matters
Priority fees create a market for transaction ordering and influence MEV dynamics. They give users control over confirmation speed. They are a key part of Ethereum's post-1559 fee model.
Related Concepts
The Priority Fee relates to the Base Fee and EIP-1559, and connects to Gas Fees and MEV. It affects transaction ordering.