Glossary
Base Fee
The protocol-set floor price per unit of gas on Ethereum, which rises and falls with demand.
Since the fee burn upgrade, Ethereum sets a base fee algorithmically each block based on how full recent blocks were. It rises when demand exceeds available space and falls when blocks are under target.
The number you see in a wallet is not the base fee. It is the base fee multiplied by a priority tip you choose, which is why two people sending identical transactions at the same moment can pay very different amounts.
Because it responds to block space, the base fee is the clearest signal of network demand. It also means that timing a transaction to a quiet period is often worth more than optimising anything about the transaction itself.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.