# Solana Fees Overview

Blockchain networks use fee markets to prioritize transactions based on the fees paid, acting as a dynamic pricing mechanism for network resources like block space and transaction execution. These markets help maintain network efficiency and prevent spam transactions.

On Solana, [**transaction fees**](https://github.com/urani-labs/solana-mev-literature/blob/main/1_Solana.md#8%EF%B8%8F%E2%83%A3-solana-fees) are low-cost and predictable, structured as flat fees based on the number of signatures. Each signature incurs a fee of 5000 lamports, equivalent to 0.000005 SOL.

Additionally, Solana's account model can, in theory, dynamically adjust fees in response to state disputes, helping to improve network performance.

***

## Local Fee Market

Unlike the typical global fee market found on EVM-based chains, Solana's fee markets are designed to be local to each account, meaning that each program on Solana operates within its own fee market.

Referred to as the **local fee market,** this system is still being developed on the blockchain. In this model, for example, the cost required for prioritization in an NFT drop would be inherently distinct from the fee needed for a DEX trade.

***

## Priority Fees

What happens if there is a sudden surge in transactions? [**Priority fees**](https://www.helius.dev/blog/solana-fees-in-theory-and-practice#fees-in-practice) are optimal fees designed to dynamically adjust transaction costs based on network conditions, allowing for more accurate demand pricing at any given time.

Validators are economically incentivized to schedule transactions with the highest fee per compute unit, thus optimizing resource usage:

$$
\texttt{priority fee} = \texttt{compute units} \times \texttt{compute unit price}
$$

{% hint style="info" %}
Learn how to use priority fees on Solana programs [**here**](https://solana.com/developers/guides/advanced/how-to-use-priority-fees).

Please be aware that this system is still under development.
{% endhint %}


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