# Chain Fees

## What is a 'transaction fee'?

In the Cosmos SDK blockchain ecosystem, a transaction fee refers to the cost incurred by users when executing transactions on the network. These fees are typically paid in the native cryptocurrency of the blockchain, which in the case of the Migaloo Zone, is WHALE.

## Why do transaction fees exist?

Transaction fees serve several purposes:

1. **Network Security**: Transaction fees help prevent spam and denial-of-service attacks by making it costly for attackers to flood the network with transactions.
2. **Economic Incentives**: Fees incentivise validators to include transactions in blocks by rewarding them and their stakers with the fees collected. This ensures that the network remains secure and operational.
3. **Resource Allocation**: Transaction fees can be adjusted dynamically to ensure that network resources are allocated efficiently. During periods of high demand, fees may increase to prioritise transactions, while they may decrease during periods of low activity.

Every block, gas fees are sent to the reward pool and dispersed to validators who distribute them to delegators in the form of staking rewards.

## How are fees Calculated?

Each validator has the ability to set their own minimum gas fee, although validators typically agree to a specific minimum to which they all adhere. Transaction fees on Migaloo are typically low, although they can vary slightly depending on the transaction you are trying to complete.

## Migaloo Burn Fee

The launch of Migaloo v4 introduced a burn mechanism to the chain. The burn mechanism has the ability to burn the chain transaction fees. The amount of the transaction fee that is burned can be voted on and adjusted via a governance proposal. The burn amount can be set anywhere between 0% (no WHALE from the transaction is burned) and 100% (all WHALE from the transaction is burned.

At the moment 100% of Migaloo Zones transaction fees are burned. Community tax is subtracted before the WHALE is burned, ensuring WHALE consistently flows to the Community Pool

## Community Tax

Migaloo Zone has a "Community Tax". This is a tax on the revenue of the chain. A 10% tax is applied and sent to the community pool for Validators and Stakers to use. As Migaloo allows Staking of the WHALE/wBTC LP the community pool is constantly being filled Protocol owned Liquidity (PoL)


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