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Version: Endpoint V2 Docs

Transaction Pricing Model

LayerZero's transaction pricing model is designed to fairly distribute costs across the various components that enable secure, reliable cross-chain messaging. Understanding this model helps developers and users make informed decisions about gas allocation and fee optimization.

Why Cross-Chain Pricing is Complex​

Traditional blockchain transactions occur within a single network where gas costs are predictable and uniform. Cross-chain messaging introduces unique challenges:

  • Source chains have no knowledge of destination chain state, gas prices, or execution requirements
  • Multiple networks with different native tokens, gas mechanisms, and pricing models must be coordinated
  • Off-chain infrastructure (DVNs and Executors) provides critical services that require compensation
  • Message execution on the destination must be funded upfront from the source chain

LayerZero's pricing model addresses these challenges through a transparent, component-based fee structure.

Four-Component Fee Structure​

Every LayerZero transaction consists of four distinct cost elements:

1. Source Chain Transaction​

The standard blockchain transaction fee paid to miners/validators on the source network for including your transaction in a block. This follows each chain's native fee mechanism (gas on Ethereum, compute units on Solana, etc.).

2. Security Stack Fees​

Payment to your configured Decentralized Verifier Networks (DVNs) for verifying and attesting to your message. These fees:

  • Vary based on your security configuration (number and type of DVNs)
  • Scale with the complexity of verification required
  • Are split among your chosen verifier networks

3. Executor Fees​

Compensation to Executors for delivering and executing your message on the destination chain. This covers:

  • Monitoring source chains for new messages
  • Submitting transactions on destination chains
  • Managing the operational infrastructure for reliable delivery

4. Destination Gas Purchase​

The cost of purchasing destination chain gas tokens to fund your message execution. This is calculated by converting your specified gas amount from destination pricing to source chain tokens.

Cross-Chain Gas Conversion​

Since you pay on the source chain but consume gas on the destination chain, LayerZero workers perform real-time conversion using market prices:

Source Chain Cost=gasUnits×dstGasPrice×dstTokenPricesrcTokenPrice\Large \text{Source Chain Cost} = \text{gasUnits} \times \text{dstGasPrice} \times \frac{\text{dstTokenPrice}}{\text{srcTokenPrice}}

Where:

  • gasUnits: Amount of gas needed on destination chain (e.g., 200,000)
  • dstGasPrice: Gas price on destination chain (e.g., 50 gwei)
  • dstTokenPrice: USD price of destination chain's native token (e.g., $3,000 for ETH)
  • srcTokenPrice: USD price of source chain's native token (e.g., $1.50 for MATIC)

The formula works in two steps:

  1. Calculate destination gas cost: gasUnits × dstGasPrice = cost in destination tokens
  2. Convert to source tokens: Multiply by the price ratio to get equivalent cost in source tokens

Example Scenario​

Sending from Polygon (MATIC) to Ethereum (ETH):

  • gasUnits: 200,000 units
  • dstGasPriceWei: 50 gwei
  • dstTokenPrice: ETH = $3,000
  • srcTokenPrice: MATIC = $1.50

Calculation:

Step 1: Calculate gas cost on destination chain
200,000 gas units × 50 gwei = 10,000,000 gwei = 0.01 ETH

Step 2: Convert to source chain tokens using price ratio
0.01 ETH × ($3,000 ETH ÷ $1.50 MATIC) = 0.01 × 2,000 = 20 MATIC

This ensures you pay the correct amount in your source chain's currency to fund execution on any destination chain.

Dynamic Pricing Factors​

Several factors influence the final transaction cost:

Chain-Specific Variations​

  • Gas mechanisms differ across chains (Ethereum's EIP-1559, Arbitrum's L2 fees, Solana's compute units)
  • Network congestion affects base gas prices
  • Token price volatility impacts cross-chain conversion rates

Security Configuration Impact​

  • More DVNs increase verification costs but enhance security
  • Premium DVN services may charge higher fees
  • Custom security thresholds affect overall pricing

Execution Requirements​

  • Complex contract logic requires more destination gas
  • Composed messages need additional execution allowances
  • Message size affects processing costs

Fee Estimation and Quotes​

LayerZero provides on-chain quote mechanisms that calculate exact fees before message submission:

Quote Components​

  • Native fee: Cost in the source chain's native token
  • LZ token fee: Alternative payment option using LayerZero's utility token
  • Real-time pricing: Updates based on current gas prices and token values

Payment Flexibility​

Applications can choose between:

  • Native token payment: Using the source chain's gas token (ETH, MATIC, AVAX, etc.)
  • LZ token payment: Using LayerZero's cross-chain utility token for consistent pricing

Gas Profiling Considerations​

Destination gas requirements vary significantly based on your application logic:

Typical Gas Ranges​

  • Simple token transfers: 60,000-80,000 gas
  • Complex DeFi interactions: 200,000-500,000 gas
  • Multi-step composed operations: 300,000+ gas

Optimization Strategies​

  • Profile your contracts on each target chain to understand actual consumption
  • Include gas buffers to account for network-specific variations
  • Test execution paths thoroughly to avoid failed deliveries
  • Monitor gas costs across different chains and adjust allocations accordingly

Best Practices​

For Developers​

  • Design gas-efficient contracts to minimize destination execution costs
  • Implement proper fee estimation in your application interfaces
  • Consider chain-specific optimizations for frequently used pathways
  • Plan for gas price volatility in your economic models

For Users​

  • Understand total cost breakdown before initiating transactions
  • Consider timing transactions during periods of lower network congestion
  • Monitor cross-chain fee patterns to optimize transaction scheduling
  • Plan gas allocations based on the complexity of your destination operations

Economic Alignment​

LayerZero's pricing model creates proper economic incentives:

  • Security providers are compensated for verification services
  • Infrastructure operators earn fees for reliable message delivery
  • Gas efficiency is rewarded through lower total costs
  • Fair pricing ensures each pathway pays for its actual resource consumption

This transparent, component-based approach ensures that cross-chain messaging costs reflect the true value provided by each part of the LayerZero ecosystem while maintaining predictable pricing for applications and users.