#GasFeeImpact
The concept of incentives for work paid in fees (gas) was introduced to compensate miners for their work on maintaining and securing the blockchain—in addition to receiving block rewards.
After the proof-of-stake algorithm was rolled out in September 2022, a portion of the gas fee became the reward for staking ETH and participating in validation—the more a user has staked, the more they can earn.
Originally, gas fees were a product of a gas limit and the gas price per unit. In August 2021, Ethereum changed its calculations for gas fees to use a base fee (a set fee for the transaction set by the network), units of gas required, and a priority fee. The priority fee is a tip to the validator that chooses a transaction—the more you tip, the higher the chances are that your transaction will be processed faster.1
Gas and the Ethereum Virtual Machine (EVM)
Ethereum, as a platform and system, is designed to be used by others to create more use cases for blockchain and cryptocurrency. For this reason, it is commonly called the Ethereum Virtual Machine, because applications can be created that run on it. The EVM is essentially a large virtual computer, like an application in the cloud, that runs other blockchain-based applications within it.