Network & gas fees

On blockchains, each node is incentivized to provide processing power to add a new block by the promise of collecting a reward. One such reward is a network fee — paid per transaction in the network’s native currency by the address wishing to execute the transaction. These fees serve an important role:

• Network fees help pay for network security by rewarding the people who keep track of activities across the network.
• Network fees incentivize purposeful use of the network. Free transactions would make it trivial to spam the network with meaningless activity, threatening its stability.
• Fee calculation differs by blockchain — Anchorage Digital simplifies this by managing network fees on behalf of clients.
• On Ethereum, fees are called gas fees. On Bitcoin, they are simply called transaction fees.

For deeper background, see Chapter 6 of the Bitcoin Whitepaper and the Gas and fees article on Ethereum’s website.

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Anchorage Digital fee requirements

For any blockchain interaction through Anchorage Digital:

• The wallet interacting with the blockchain must pay the transaction fees for that transaction.
• The wallet must hold enough balance to cover eventual transaction fees.
• Required balance is either:
  • Estimated — for withdrawals, staking, and smart contract operations. Estimates are conservative to ensure sufficient funds remain at broadcast time.
  • Fixed — referred to as the “Fee threshold” for transfers initiated through the API.
• The actual fee set at broadcast time is always based on a network fee estimate plus an overhedge.

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Transaction FeeThreshold (API only)

To ensure on-chain operations triggered by API have the highest probability of processing during times of high fees and market volatility, Anchorage Digital defines an internal FeeThreshold for each protocol. This FeeThreshold is an internal “sufficient funds” check — not the actual fee charged. It ensures that when multiple transfers or operations are triggered from the same wallet, funds exist to process each transaction. Once this check passes, the transaction is processed on-chain and the actual fee is charged. If a transfer is queued, the transfer amount and feeThreshold are held and inaccessible to prevent double-spending. If the wallet has insufficient funds, the API call returns an error.

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Gas limit

The gas limit specifies how many units of gas a user is willing to pay to get a transaction executed. Gas units represent the computational work required to execute the transaction — more complex interactions require more gas. Examples:

• A simple ETH transfer requires exactly 21,000 gas units.
• An ERC-20 transfer requires more.
• A smart contract swap requires substantially more.

Setting a gas limit below what’s required causes the transaction to fail on-chain.

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Base fee

The base fee is set by the network to manage congestion. A transaction must offer at least the base fee to be eligible for inclusion in a block. The base fee adjusts between blocks:

• Increases by 12.5% if the previous block was more than half full.
• Decreases by 12.5% if the previous block was below the threshold.

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Gas station

The Anchorage Digital gas station is a convenient option for covering gas fees on ETH and ERC-20 withdrawals and transfers. The gas station is enabled at the organization level. If the toggle is not visible in your UI, contact your account executive for enablement. Gas station use is optional per transfer, controlled by the useGasStation flag: