Avalon Labs (AVL) revolutionizes Bitcoin finance with BTC-backed stablecoin lending, CeDeFi & DeFi solutions. Borrow, stake & earn with BTC-based assets.

 (BTC)’s financial ecosystem, known as 

, has experienced significant growth over the past few years, with a number of sidechains, rollup platforms and cross-chain applications helping users leverage their BTC funds for 

 (DeFi) operations. One of the newer BTCFi solutions on the market is Avalon Labs, a multi-chain platform focused on Bitcoin-backed 

Avalon lets users borrow stablecoins by providing collateral in BTC or BTC-related assets, such as Bitcoin-pegged tokens and 

 of Bitcoin. Users can access funds at fixed repayment rates, ensuring stability in the otherwise volatile crypto finance world. This stability, in turn, drives the more active use of Bitcoin-backed assets in the 

Importantly, Avalon Labs has secured access to billions of dollars in accessible stablecoin funds from centralized finance (CeFi) institutions, helping it act as a key bridge between the worlds of traditional and crypto finance.

 (AVL) is a decentralized BTCFi lending platform that lets users borrow stablecoins by supplying collateral in the Bitcoin cryptocurrency or in BTC-related crypto assets.

 The platform also provides opportunities to earn yield by supplying crypto funds to several liquidity pools. The platform's flagship asset is the USDa stablecoin, backed by Bitcoin.

Avalon also offers other lending opportunities via two primary modes: CeDeFi and DeFi. The CeDeFi offering allows users to access funds in the 

 (USDT) stablecoin, while the DeFi component is made up of three lending and borrowing pools — based on BTC and BTC's liquid staking derivatives, 

Avalon Labs has implemented a series of risk mitigation measures in order to protect its users and ecosystem. Measures focusing on the lending mechanism include the requirement for overcollateralization of all loans, and a rigorous liquidation procedure activated when the 

 (LTV) ratio drops below sustainable levels. Platform-wide risk mitigation measures include regular internal and external security audits, and AI-driven 

Avalon Labs operates on multiple blockchain platforms, including 

, with plans to expand to more decentralized networks in the future.

The project conducted its seed round fundraising in March 2024, and actively entered the BTCFi niche in November 2024 with the launch of its USDa stablecoin. As of the time of writing in early February 2025, the platform is preparing for the launch of its native token, AVL.

USDa is Avalon’s Bitcoin-backed stablecoin, designed to help BTC holders put their funds to active use in the DeFi ecosystem. By providing Bitcoin-based collateral, borrowers can mint USDa, which is freely exchangeable with the USDT stablecoin at a 1:1 ratio. As such, USDa is indirectly pegged to the U.S. dollar via a fixed-rate USDT conversion mechanism.

By locking their collateral and requesting USDa, users create so-called collateralized debt positions (CDPs) — an overcollateralized crypto debt instrument first popularized in the DeFi industry by 

Besides the stable, USD-pegged rate, USDa boasts several other benefits. First, borrowers can access fixed-rate interest repayments for their debts, enjoying certainty in planning their payments to the platform. Secondly, early finalization of debt doesn’t carry a financial penalty. Importantly, USDa can be put to use across different chains, thanks to its utilization of the 

CeDeFi Lending is a major component of Avalon Labs' focus on Bitcoin-backed loans. The project claims to have secured access to billions of dollars in USDT and 

 (USDC) funds at traditional finance institutions. This allows Avalon users to borrow funds in these popular stablecoins at fixed rates of 8 –10%. As of late January 2025, Avalon's CeDeFi lending component allows you to borrow USDT by providing collateral in Ignition FBTC (FBTC), a Bitcoin-pegged omnichain cryptocurrency. Other collateral and borrowing assets (e.g., USDC loans) might also be introduced in the future.

Avalon Labs’ DeFi lending component is represented by three main types of liquidity pools, against which users can lend and borrow assets. The BTC LSD Pools are made up of BTC and BTC-based liquid tokens, with each liquid token isolated to its own independently operating pool. There are also RWA Lending Pools, which consist of RWA tokens and stablecoins. The third type is the General Pool, containing mainstream assets like BTC, ETH, popular stablecoins and more.

The platform separates each asset, such as each liquid token or RWA, into its own isolated pool. Pool isolation helps structure risk mitigation measures carefully tailored to each asset.

For the first few months on the market, Avalon has operated without a native token. The project is currently gearing up for the introduction of its 

, AVL, to be launched sometime in Q1 2025. AVL will support not only governance but also a range of other functions. One of these is staking. By staking AVL, users will be issued sAVL, an asset that will be used directly for governance processes. sAVL holders will participate in votes to decide the rules and future direction of the platform. Staking will also let them accrue crypto rewards in AVL tokens.

Additionally, AVL will provide access to exclusive features, perks and fee rebates on its platform.

The AVL token will be issued with a total supply of 1 billion. Planned supply allocation shares are as follows:

 platform. Bybit Pre-Market Spot is an over-the-counter (OTC) trading platform that allows you to acquire promising new cryptocurrencies before listings on Bybit's main Spot trading market, letting you access these assets at potentially discounted rates.

The AVL listing on Pre-Market Spot lets you speculate on the new token's potential. Naturally, before investing in any asset (whether it's offered via Pre-Market Spot or other trading environments), you’re encouraged to 

 on the project's background, operational details and future potential.

The sphere of financial solutions for the Bitcoin blockchain is quickly gathering pace, with several projects in the cryptocurrency market aiming to help Bitcoin holders put their funds to active use. Avalon Labs is a key initiative within this niche of the cryptocurrency industry, offering a much-needed service — stablecoin issuance backed by the security of Bitcoin. 

Early indicators suggest that this project has significant potential within the Bitcoin ecosystem, as well as within the wider crypto ecosystem. Of particular importance is the project team's claimed access to billions of dollars in USDT and USDC funds at traditional institutional finance providers. A thorough risk management framework — supported by regular audits, AI-driven monitoring, and sound debt collateralization and liquidation mechanisms — also provides further assurances to the user community.

The benefits offered by Avalon Labs are clear-cut, but more details on access to the billions of dollars at traditional finance providers would certainly contribute to user trust in the platform, something that's always helpful for any young web3 startup. Currently, however, the main focus is on the platform's imminent native token launch. AVL's token generation event (TGE) will be a significant evolutionary step in the life of this promising BTCFi project.

Intermediate

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Avalon Labs (AVL): Driving Bitcoin’s Financial Evolution

Helium Mobile is revolutionizing telecom with three new plans, including the Zero Plan.

Daily Top Performer — Ampleforth (FORTH)

The S&P 500 rose 0.72% on Tuesday, but futures fell on Wednesday after Alphabet’s weak earnings while investors await more earnings reports. Gold hit a record $2,845.14 as U.S.-China tariffs fueled safe-haven demand. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 4.35%, with Bitcoin and Ether dropping by 2.52% and 6.25%, in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is FORTH, which surged nearly 49.1% following the announcement of Ampleforth’s Evergreen Cycle, a decentralized solution for resilient DeFi treasuries.

Ampleforth (FORTH), founded in 2018, is a stablecoin that adjusts its supply daily through “rebasing” to maintain price stability, ensuring holders keep their proportional ownership. Ampleforth 

 AMPL and SPOT as decentralized alternatives for DeFi treasuries, reducing reliance on centralized stablecoins. AMPL’s elastic supply and SPOT’s low volatility offer DAOs a resilient treasury strategy through the "Evergreen Cycle"—buying AMPL in bullish markets and rotating into SPOT during downturns. This system enhances liquidity, mitigates market cycle risks, and enables DAOs to act as decentralized “micro central banks,” reinforcing long-term stability in DeFi.

Check Out the Latest Prices, Charts, and Data of 

Helium Mobile is revolutionizing telecom with 

, including the Zero Plan, which offers free mobile service (3GB data, 300 texts, 100 minutes) while rewarding users with Cloud Points for sharing anonymized data. These points can be redeemed for gift cards and experiences. Other plans include the Air Plan ($15/month) for 10GB and the Infinity Plan ($30/month) for unlimited data. Helium Mobile combines community-powered networking with the nation’s largest 5G coverage, making mobile service more affordable, flexible, and rewarding. The plans are currently invite-only, with a waitlist available.

Yesterday, BTC Spot ETFs recorded $91.7M in total inflows, with $72.2M from non-GBTC and $19.5M from GBTC.

, a decentralized social network platform, is hinting at a potential airdrop for users. To increase chances of receiving the airdrop, users should sign up on the platform, create a Town, deposit ETH, and join other Towns to earn points. Towns raised $25.5M in funding and operates on the Caldera network. Tipping others and daily engagement may boost rewards.

Beginner

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Helium Mobile Introduces Free Plan and Rewards for Staying Connected

Haedal unlocks liquidity for staked SUI by converting it into haSUI tokens, enabling users to earn rewards while freely participating in DeFi activities.

vWhat if you could earn staking rewards and keep your crypto liquid? Haedal, a pioneering 

 blockchain, turns this possibility into reality. Haedal eliminates the trade-off between 

 and accessing liquidity by transforming staked SUI tokens into haSUI — a yield-bearing asset usable across 

 (DeFi). This article explores how Haedal simplifies staking, enhances capital efficiency and unlocks superior returns while fueling the growth of the Sui ecosystem.

Haedal is a liquid staking protocol on the Sui blockchain that allows users to stake SUI tokens, mint haSUI (a yield-bearing 

) and earn additional rewards through DeFi integrations. It simplifies participation in staking while maintaining liquidity for decentralized finance activities.

Haedal was created by a group of anonymous blockchain enthusiasts and experts who recognized the need for a more efficient and secure way to stake SUI tokens on the Sui blockchain. Their vision for Haedal was born from the desire to improve the DeFi ecosystem by offering a simple, one-click liquid staking solution. This approach allows users to earn rewards while still keeping their assets flexible and liquid.

Haedal bridges the gap between staking and decentralized finance, making it easier for users to participate in various DeFi activities without sacrificing security or efficiency. By doing so, Haedal boosts user engagement within the Sui ecosystem and also helps strengthen and expand the broader DeFi ecosystem, paving the way for greater blockchain adoption.

Haedal seeks to address the major issue of lack of liquidity in traditional staking models, whereby users must lock their assets for fixed periods. This restricts their ability to use those funds for other investments or DeFi activities, such as 

 or governance participation, reducing flexibility and deterring engagement. 

Another barrier is the complexity of staking management. Selecting validators, monitoring performance and handling technical processes can overwhelm newcomers — and even experienced users. This steep learning curve limits broader adoption and discourages participation in ecosystem growth. 

Also, many staking systems suffer from inefficiency and security risks. Outdated practices or centralized control can expose users to asset loss and/or downtime, while fragmented platforms make participation cumbersome. These vulnerabilities erode trust and hinder the scalability of decentralized networks. 

 technology to tackle liquidity constraints, simplify user experience and enhance security, aiming to create a more accessible and efficient ecosystem for staking and DeFi integration.

Haedal deploys the following advanced mechanisms to make staking SUI tokens more flexible and user-friendly. 

haSUI is a versatile token that unlocks liquidity for users who stake their SUI tokens through Haedal. When users stake SUI, they receive haSUI at a 1:1 ratio, acting as a dynamic “receipt” for their staked assets. Unlike 

, in which funds are locked and unusable, haSUI retains liquidity, allowing users to trade, lend or use it as collateral in DeFi apps while their original SUI continues earning staking rewards. 

Over time, haSUI’s value grows as it accumulates rewards from validators securing the Sui blockchain. This dual functionality bridges the gap between passive income and active participation in DeFi, letting users maximize their crypto holdings without compromise. 

Haedal streamlines staking by automating the entire process. Users deposit SUI tokens into the protocol, which then delegates them to trusted, high-performing validators on the Sui network. This eliminates the need for users to research validators or manage technical details manually. The system continuously monitors validator performance, reallocating stakes to optimize returns and minimize risks. 

Unlike more rigid staking models, Haedal’s protocol imposes no lockup periods, so users can unstake at any time by swapping their haSUI back to SUI. This flexibility, combined with automated efficiency, makes staking accessible to everyone, from newcomers to institutions, while ensuring their contributions actively support Sui’s network security. 

The Random Vault adds an element of chance to traditional staking, creating a fun and community-driven experience. Users deposit SUI into the vault for one week, during which their funds are delegated to validators. At the end of the week, all staking rewards generated by the vault are pooled and distributed to five randomly selected participants. This gamified approach injects some excitement while also diversifying risk by spreading stakes across multiple validators automatically. 

Participants enjoy a hands-off experience, requiring no active management, while gaining exposure to potential bonus rewards. The Random Vault democratizes staking, offering both seasoned users and casual participants a fresh way to engage with the Haedal ecosystem. 

The Haedal Market Maker (HMM) ensures seamless trading and liquidity for haSUI tokens, addressing common challenges in DeFi: price volatility and accessibility. HMM operates by providing deep liquidity pools for haSUI trading pairs, which stabilizes prices and minimizes slippage during trades. This means users can buy or sell haSUI quickly and at fair market rates, even during periods of high demand. 

HMM maintains a tight peg between haSUI and SUI and enforces trust and usability, making the token practical for everyday DeFi activities, such as swapping, lending and/or collateralizing loans. This infrastructure not only benefits individual users, but also strengthens the broader Sui ecosystem, encouraging adoption and enabling institutions to participate confidently in the decentralized finance realm. 

Haedal has achieved significant milestones, including launching its liquid staking protocol, growing its 

Looking ahead, the project aims to expand its product offerings, improve scalability and strengthen its role in the Sui ecosystem. 

Haedal redefines staking on Sui by merging liquidity, simplicity and innovation. By transforming staked SUI into yield-bearing haSUI tokens, it unlocks DeFi opportunities without sacrificing rewards or security. Features such as automated staking, gamified vaults and robust liquidity solutions empower users to maximize earnings while supporting network growth. 

With a clear road map and a community-driven ethos, Haedal is positioning itself as a catalyst for accessible, efficient decentralized finance, bridging traditional asset holding with the dynamic potential of blockchain.

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Haedal: Unlock Superior Returns With Sui Liquid Staking

Loopy is a Sui-based meme coin inspired by a beaver with a distinctive pink hue that’s featured in the Pororo the Little Penguin cartoon. Learn more here.

If you want a comprehensive crypto portfolio, it pays to check out 

. Though these coins might not be worth as much as major cryptos, their potentially drastic price swings can result in big profits for investors. One intriguing 

 meme coin to check out is Loopy, a cartoon-themed coin (inspired by a popular television show) that’s had an interesting growth pattern of late. To see if Loopy is the right investment for you, we’ll take a look at its tokenomics and pricing trends. 

 is a meme coin based on the Sui blockchain. It's inspired by a beaver with a distinctive pink hue that’s featured in the 

 cartoon. Much like the character herself, the Loopy coin hopes to showcase the values of friendship, hope and harmony.

On a technological level, Loopy works similarly to other meme coins. Loopy uses the Sui blockchain as the foundation for its system. This delegated 

 network is known for its scalability and speed. Loopy takes advantage of Sui's features by using its standardized 

 and token creation protocols. Since Loopy doesn't have to run its own blockchain, it can focus more on the marketing side of operating a cryptocurrency.

In order to increase its token's market capitalization, Loopy has heavily integrated itself into social media. Loopy runs both a Telegram channel and a 

 where it interacts with its audience. These sites post memes about gentlehearted Loopy, encouraging users to share their own. 

In addition to marketing the Loopy coin, these social media sites also help to operate the entire Loopy community by tracking member participation and using these metrics to determine eligibility for 

Loopy's token, with the symbol LOOPY on most exchanges, is a traditional meme coin that has no utility outside of entertainment. Its sole purpose is to appeal to fans of gentlehearted Loopy in 

 The Loopy coin does have a somewhat higher supply than many other tokens, with a 

. Half of the tokens were distributed to community members in an 

, while the other half were used for token liquidity. The majority of these tokens are circulating now, so the coin's current circulating supply is close to its total supply of 1 trillion tokens.

Loopy was released back in October 2024, so it's already been the subject of a few newsworthy events. The coin was initially selling for around $0.000012, but a decline in trading volume led to a sudden price drop, to around $0.0000035 in early November 2024. Fortunately, fans of the beaver with the distinctive pink hue rallied behind it, and it surged to an impressive all-time high (ATH) of $0.000013 by mid-November. 

When the Loopy token’s price increased by over 763% in just 24 hours, it began receiving a lot of attention. The coin's market cap reached $17 million, and it was briefly one of the top Sui meme coins. Since its heyday, the Loopy token has had some struggles. Starting in January 2025, coin prices dropped to as low as $0.00000004 as its market cap plummeted. 

However, these unusually low prices have been just as noteworthy as the coin's ATH. Loopy fans who were getting priced out of owning the token have been expressing interest in it once again, due to its more affordable prices. The trading volume of Loopy might look a little low now, but it's no longer in free fall, as it was in early January 2025. Some market analysts even suggest that LOOPY’s price may reach 

LOOPY tokens have a high current circulating supply, but not all exchanges support this token yet. It's primarily available through smaller, decentralized exchanges. However, if you prefer a more convenient experience, check out the 

. This service provides access to DEX offerings, while maintaining the same great service that all Bybit users can count on. Purchasing LOOPY through Bybit is as simple as checking the current price, entering the number of LOOPY you want to buy and confirming your purchase. 

LOOPY's market cap and 24-hour trading volume have certainly declined from the coin’s heyday, but it still holds some promise for investors. The low current price means that it's possible to buy a lot of LOOPY without spending much money. This can result in big profits if the coin experiences even minor price increases. Furthermore, most pricing analyses suggest that LOOPY's market cap could recover in the future.

However, don't forget that this sort of investment can be risky. Some meme coins generally fail to return to their ATHs after brief enthusiasm during their launches. Loopy's team hasn't been promoting their coin as much lately, so whether or not LOOPY can recover will rely mostly on the coin's fanbase. While investing a bit of extra money you have in LOOPY could be fun, it’s not recommended that you invest money you can’t afford to lose. Meme coins are always volatile, and it’s essential to use some caution and 

 any time you invest in tokens such as LOOPY.

While LOOPY tokens might not have the highest 24-hour trading volume anymore, this meme coin is still backed by a dedicated community. Its ability to appeal to 

fans with positivity and humor has helped it stand out from other Sui meme coins. Loopy is a great example of how a simple yet fun concept can end up appealing to thousands of investors.

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Loopy (LOOPY): The Most Adorable Meme Coin on Sui

Crypto

Blockchain

Bitcoin

Blockchain transaction fees are implemented to expedite a transaction validation process and to keep the network fluid. But why do the fees fluctuate? Find out more.

Blockchain-Transaction-Fees.jpg

In 1998, Chinese engineer Wei Dai first introduced the concept of “

.” Unlike conventional currency, digital currency only exists online. Users can exchange cryptocurrency online after purchasing tokens using “real” — i.e., traditional or fiat — currency. Cryptocurrency eliminates the need for a central controlling authority, such as a financial institution or government office, and instead creates a fast, easy and effective way for people around the world to exchange money.

About a decade after the idea of cryptocurrency was first described, an innovator using the pseudonym “Satoshi Nakamoto” 

 the concept behind Bitcoin. Today, Bitcoin (or BTC) is one of the most popular forms of cryptocurrency. While Bitcoin has eliminated the need for a central authority, it hasn’t removed the costs associated with the technology underpinning cryptocurrencies. Knowing how this technology works can help you better understand transaction fees — and how to minimize your costs when using cryptocurrencies.

All verified Bitcoin transactions are stored via 

, a type of database which stores data electronically. The primary difference is that databases use tables to structure their data, while blockchains store data in blocks. When a block is filled, it’s added, time-stamped and “chained” to the previous one. This creates a record with readily accessible data and an immutable timeline.

Like databases, blockchains require multiple computers to manage and store data. However, databases use servers, which tend to be owned by a specific person or entity, whereas blockchains store data on multiple computers owned by numerous people or entities.

Bitcoin’s network includes thousands of computers called 

, all working together to verify transactions, fill blocks and keep the system functioning.

For a blockchain to function at its best, it must be secure, decentralized and scalable. The blockchain trilemma, a concept introduced by a programmer (and Ethereum founder) 

, refers to the idea that blockchain projects struggle to meet all three ideals. 

Blockchain developers are using the concept of the trilemma to further refine networks and create tools to achieve optimal functionality.

Blockchain is designed to be democratic and immutable. The blockchain security is maintained through coding, as well as consensus algorithms which dictate the number of network nodes required to confirm transactions before finalization. And since the blockchain is made up of a series of blocks that record the data in hash functions with timestamps, it has proven its resilience against data tampering and hacks. 

One of the jobs of central institutions is to prevent

 and similar issues. However, they’re vulnerable to 

 and other security issues. The idea of a decentralized blockchain network is deciphered as an environment where no one needs to know anyone since each node is passed on with the same information on a distributed ledger. 

Decentralized systems such as Bitcoin are essentially invulnerable to these issues, and consensus algorithms or mechanisms provide further system security while preventing double-spending and enforcing peer equality. Shall anyone attempt to alter or corrupt the ledger, the majority of network participants need to reach a consensus to do so.

During periods of heavy use, traffic jams can occur, slowing transaction processing and driving up costs for users. A scalable blockchain is essential to maintaining a competitive edge with centralized networks.

To overcome and address the blockchain trilemma, some developers recommend making direct modifications to the network — layer-1 solutions, such as Ethereum. Others have suggested developing secondary networks, or 

, designed to run alongside the blockchain, such as 

 on Bitcoin or Litecoin. It’s important to note that blockchain technology is still in its infancy, and as it evolves, so will potential solutions to the blockchain trilemma.

In Bitcoin’s early days, miners worked quickly to validate transactions. As the digital currency has exploded in popularity, transactions have become more numerous and complicated. The 

 was initiated to speed Bitcoin transaction validation.

Fees are tied to the size of the transaction and input age. In other words, a transaction that comprises more bytes that take up more block data will have higher transaction fees. Additional fees can speed the transaction through the system, essentially placing it in a priority queue. In other words, you can pay more to have transactions validated faster.

Collected fees go to the miners, who validate and record the Bitcoin transactions and help keep the system fluid and functional by:

In other words, Bitcoin transaction fees protect and preserve the integrity of the Bitcoin network.

Conceptually, Bitcoin transaction fees represent the speed with which a user wants their transaction validated on the blockchain. Although the decentralized nature of Bitcoin makes it easy for anyone to 

— which means verifying and recording transactions to form a block and are joined by a chain. However, the process of mining Bitcoin, or BTC, is both complex and expensive. Mining rigs are expensive and often times consume massive amounts of electricity, while the block subsidy and transaction fees help offset these costs and incentivize miners whenever a new block has been validated. 

Miners are granted transaction fees and block subsidies as a “block reward” whenever they successfully added a block to the blockchain. The block subsidy is fixed with each Bitcoin mining and was reduced by half (

) which will happen every four years or every 210,000 blocks. Looking back at 2009 a mined Bitcoin would earn you 50 BTC and in 2012, but as the years passes by, the rewards were halved, and the latest halving in 2020 set the rewards at 6.25 BTC.

 to fall, thus increases the computation power and energy required to mine new blocks. However, the rising transaction fees help incentivize miners to maintain network security and sanity. The transaction fees are determined based on a few factors:

The last point is under the user’s control. If you need your Bitcoin transaction to be processed urgently, you can opt to pay a higher fee to prioritize it. If your transaction is less urgent, you can opt for a lower fee. In this case, the transaction will remain in the memory pool (or mempool) until the traffic slows.

The mempool can be thought of as a queue. When you initiate a transaction, it goes to the mempool. Transactions which are waiting remain in the mempool until a miner confirms and adds them to the block. When the mempool fills, miners choose Bitcoin transactions with higher fees first.

This system can keep transactions moving more smoothly, but it can also lead to a kind of bidding war. Many people using cryptocurrencies are willing to pay a premium to ensure their transactions are completed first. However, this tactic can backfire, especially during periods of heavy use. Some users end up overpaying fees, which forces other miners to also increase their fees.

The biggest names in cryptocurrency are Bitcoin (BTC) and Ether (ETH) and understanding how fees are calculated can ensure you’re paying a fair amount to complete your transaction, without getting caught up in a bidding war or unnecessarily stagnating in the mempool.

To calculate bitcoin fees, you have a couple of options. With some wallets, you can automate the process, which allows you to choose how quickly you want your transaction completed and pay accordingly.

 and then multiply based on the size of your transaction. Bitcoins are divided into Satoshis, which are one hundred-millionth (or 0.00000001) BTC. If your transaction is 225 bytes and you choose the rate of 100 Satoshis per byte, then you can expect to pay about 22,500 Satoshis in fees, since 100 x 225 = 22,500. That currently translates to just over $14, considering ​​

Until 2021, everything on Ethereum’s network was based on “gas.” Gas is the unit linked to the amount of computing power necessary to complete a specific transaction. Aptly named, gas refers to the energy used to keep the Ethereum network moving.

Under this payment system, everything has been associated with gas. A simple addition problem might require just 5 gas units, while completing an actual transaction may have a cost of 20,000. To determine the transaction fee, a user would need to know the gas price, which is measured in 

, or the equivalent of 0.000000001 (one-billionth) ETH.

To calculate, you’ll need to multiply the gas cost by the gas price. For example, you may have a transaction that will cost 20,000 gas units, and the price of gas is 100 

. Your total cost for that transaction will be two million gwei, because 20,000 x 100 = 2 million. That translates to just slightly above $7, assuming 

,” which referred to your spending limit, or how much gas you wanted to use for a specific transaction. Complex transactions required more work, so their gas limits would necessarily be higher than for simpler transactions.

This system proved to be cumbersome, however, and many users were underpaying, which could lead to the rejection of their transaction or the necessity of overpaying. (Think of it as putting too many stamps on an envelope you want to mail, instead of risking having the letter returned for insufficient postage.) The 

 changed the way users pay for transactions. ETH users instead would pay a base fee for specific transactions. Part of each collected fee is “burned,” which removes coins from circulation, and the rest goes to the miners. ETH users also have an option to “tip” miners, which can speed the processing and recording of their transactions.

Transaction fees are a necessary cost of performing financial transactions in the 21st century, and cryptocurrency transactions are no exception. Both Bitcoin and Ethereum link the cost of the transaction with its size, and users can pay more to speed the process. The average bitcoin transaction fee fluctuates from day to day, depending on the amount of traffic and other factors. The same applies to the Ethereum network.

 are between $2 and $5, which translates to between 3,700 and 9,170 Satoshi. The 

 ranges from $2 to $7, or 0.00056 to 0.002 ETH.

BTC and ETH networks are flourishing, with myriad transactions being completed and verified every day. On the Bitcoin network, 

 are completed daily. Ethereum, on the other hand, completes over 

Completing your transactions on a day when traffic is light can lower your transaction rate without forcing you to compromise on verification speed.

Hefty Bitcoin transaction fees are attractive to miners, but might not be as popular with users. The fee structure can be such that some users are paying the equivalent of their transaction amount in fees, particularly when it comes to smaller transactions.

Transaction fees aren’t the only issue dogging Bitcoin. Scalability is also proving to be something of an Achilles’ heel. The Bitcoin protocol clearly defines the block size and generation, which restricts Bitcoin to about seven 

, or TPS. This has led to Bitcoin branching off into additional forks, such as Bitcoin Gold (BTG) and 

 (BCH). Ethereum, on the other hand, has larger blockchains and can process about 20 TPS and the 

 is paying the way for a more scalable solution.

To change the Bitcoin protocol, its users must all agree on and choose a specific software. Lightning Network offers an alternative that’s designed as a Layer 2 payment protocol, which means it‘s layered on top of the blockchain. With Lightning Network, you can complete numerous transactions before closing the payment channel and settling the final transaction with the blockchain.

The Lightning Network is an off-chain solution that sits on top of a blockchain not exclusively on Bitcoin’s network primarily helps to process blockchain payments quickly and securely without potentially lengthy block confirmation times. It even allows users to complete cross-chain atomic swaps instantly without relying on third parties. 

One of the key highlights of the Lightning Network includes its ability to allow for small payments, even less than a Satoshi. The process is more private, allowing for multiple individual transactions to occur without being broadcast via the blockchain. As its name suggests, the Lightning Network is fast too, with virtually no limits on TPS. Settlement times are equally fast, with the average transaction settling in about a minute or less. Fees are lower as well.

For those in search of privacy, speed and affordability, Lightning Network offers an excellent alternative.

A consensus mechanism or algorithm refers to a specific protocol designed to ensure that networks of computers can work together efficiently while maintaining security. The algorithm is often used to ensure the crypto network can function effectively and prevent certain types of system attacks.

If Bitcoin’s primary weakness is its scalability, a more scalable consensus mechanism may help lower costs. Currently, Bitcoin runs on a 

, which requires each node to solve complex mathematical problems to validate a transaction. The first to complete the problem can add the next block to the chain. The block is then verified, with the data entered into the blockchain.

 is both more scalable and sustainable than PoW. PoS links mining power to ownership stake. Miners don’t need to expend energy solving mathematical problems but are instead limited to mining a specific number of transactions linked to their ownership stake. A miner with a one percent ownership stake would then be able to mine one percent of the blocks.

PoS systems are also less vulnerable to a certain type of economic attack. A miner would have to own more than half of the digital coins on a network to launch a system attack, which would be disadvantageous to their interests.

Ultimately, a PoS system is more scalable, energy-efficient and secure than PoW systems.

Much as a traffic jam causes congestion, a greater number of transactions waiting on a network results in slower movement and higher fees. Ergo, fees tend to increase during times of peak use.

If your Bitcoin transaction isn’t urgent, you can “camp out” and wait for an opening, much as you might choose to leave a little later in the day to avoid rush-hour traffic. The blockchain tends to have predictable peaks and valleys, due to businesses completing larger transactions. Waiting until the weekend to complete yours could mean less traffic, faster clearing transactions and smaller fees. That’s one of the advantages of markets that never close.

While custom fees are possible, still, miners prioritize and process transactions based on several factors, including the size of the fee. Your larger transactions might take a little longer to complete, but they will be added to the blockchain, usually when the traffic slows.

Higher or lower fees can significantly cut your profits and affect your capital gains and losses. While these fees are a necessary part of transacting in a digital asset, you can take steps to lower your overall costs and reduce the risk of overpaying, whether that means opting for an alternative system for smaller transactions, such as Lightning Network, or waiting until the ideal time to process your transactions. Researching your options and finding the best one for your needs can help you save on both the prices of your transactions and the cost of doing business.

Blockchain Transaction Fees: Why Do They Matter?

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