This section is a work in progress and based on the “The Great Celo Halvening - Proposed Tokenomics in the Era of Celo L2”. Please check the forum for the latest information.
Gas Pricing Mechanism
Celo employs a gas pricing model based on EIP-1559, which dynamically adjusts the base fee to manage network demand. This mechanism ensures that gas prices respond to network congestion, increasing during high demand periods and decreasing when demand is low. The protocol sets a base fee floor to prevent the base fee from falling below a certain threshold, safeguarding the network against spam transactions and uncontrolled state growth.Fee Abstraction
A notable feature of Celo’s network is fee abstraction, allowing users to pay transaction fees using approved ERC-20 tokens such as USDT, USDC, USDm, and others, in addition to the native CELO token. This flexibility simplifies the user experience by eliminating the need to hold a separate CELO balance for gas fees. To utilize this feature, transactions include afeeCurrency field
specifying the token for gas payment. It’s important to note that transactions specifying non-CELO
gas currencies incur approximately 50,000 additional gas units.
Celo allows paying gas fees in currencies other than the native currency. The tokens that can be
used to pay gas fees are controlled via governance and the list of tokens allowed is maintained in
FeeCurrencyDirectory.sol. Fee abstraction on Celo works with EOAs. No paymaster required! Learn all
about fee abstraction.