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Cosmos EVM implements Ethereum-type fee calculation compatible with the Cosmos SDK. This overview explains gas calculation, fee provision, and how the fee market (EIP-1559) prioritizes transactions. References: Cosmos SDK Gas, Ethereum Gas

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Gas and Fees Fundamentals

Gas is a unit measuring computational intensity of a transaction - the work required to execute it. Complex, multi-step transactions require more gas than simple transfers. Fees are the cost paid for gas: 
Total Fees = Gas × Gas Price

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Fee Handling

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Cosmos SDK Fees

Users specify two fields:
  1. GasLimit - upper bound on execution gas (GasWanted)
  2. One of Fees or GasPrice to specify or calculate transaction fees
The node consumes fees entirely, then executes the transaction. If GasLimit is insufficient, the transaction fails and rolls back without refunding fees. Validators specify their min-gas-prices for transaction selection. Transactions with insufficient fees encounter delays or fail.

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Ethereum Fees (EIP-1559)

With EIP-1559 (London Hard Fork), GasPrice split into two components: 
Gas Price = Base Fee + Priority Fee
  • BaseFee: Calculated automatically based on block size (burned on Ethereum, distributed on Cosmos EVM)
  • PriorityFee: Tip to proposer for transaction inclusion
Users specify:
  • max_fee_per_gas: Total GasPrice maximum
  • max_priority_fee_per_gas: Maximum PriorityFee
  • gas_limit: Gas consumption limit
Surplus gas not required for execution is refunded. Reference: EIP-1559

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Cosmos EVM Implementation

Fundamentally, Cosmos EVM is a Cosmos SDK chain enabling EVM compatibility via a module. All EVM transactions are encoded as Cosmos SDK transactions and update Cosmos SDK-managed state.

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Fee Market Module

Supports EIP-1559 gas calculation on the EVM layer:
  • Tracks gas supplied per block to calculate base fee for future transactions
  • For EVM transactions, bypasses local min-gas-prices and applies EIP-1559 fee logic
  • Gas price must exceed both global min-gas-price and block’s BaseFee
Key differences from Ethereum:
  • BaseFee is distributed to validators/delegators (not burned)
  • BaseFee is lower-bounded by global min-gas-price (currently zero, adjustable via governance)

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EVM Gas Refunds

Cosmos EVM refunds a fraction (at least 50% by default) of unused gas for EVM transactions to approximate Ethereum behavior. This is adjustable.

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Block Processing Timeline

  1. EndBlock: FeeMarket module tracks total TransientGasWanted from block transactions for next block’s BaseFee
  2. Transaction Reception: Nodes receive and gossip transactions, prioritized by fee price
  3. BeginBlock:
    • FeeMarket calculates BaseFee (code) using previous block’s GasWanted
    • Distribution module distributes previous block’s fee rewards
  4. Transaction Processing:
    • AnteHandler validates transaction, verifies fees > minimum values and BaseFee, deducts fees to fee_collector module
    • For Cosmos transactions: Execute and consume gas
    • For Ethereum transactions: Execute with gas isolation, calculate gas used, refund surplus
  5. EndBlock: Store block’s GasWanted for next block

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Gas Mechanics

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Cosmos Gas Metering

  • GasMeter: Tracks gas consumed during state transitions (reset per transaction)
  • BlockGasMeter: Tracks gas consumed in block, enforces predefined limit (set via governance)
Gas is priced per-byte. Since Cosmos uses Big.Int types (dynamically sized), larger parameter values are more gas-intensive than smaller ones.

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Matching EVM Gas Consumption

The EVM uses a gas table for each OPCODE, whereas Cosmos uses a GasConfig with flat and per-byte costs for database operations. To match EVM gas consumption, Cosmos EVM:
  • Ignores SDK gas consumption logic
  • Calculates gas consumed by subtracting EVM leftover gas + refund from gas limit
  • Resets transaction GasMeter to 0 and manually sets it to gasUsed value from EVM execution
Implementation: x/vm/keeper/state_transition.go

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AnteHandler

Performs basic checks before transaction execution:
  • Signature verification, transaction field validation, transaction fees
  • Verifies user has sufficient balance for tx cost (amount + fees)
  • Checks gas limit >= computed intrinsic gas

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Gas Estimation

Ethereum’s eth_estimateGas is implemented via EstimateGas query API. It:
  • Applies transaction against current block/state
  • Performs binary search to find optimal gas value
  • Uses cache context to avoid persisting state changes
Implementation: x/vm/keeper/grpc_query.go For Cosmos transactions, use transaction simulation.

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Zero-Fee Transactions

In Cosmos, minimum gas price is not enforced by AnteHandler - validators specify their own min-gas-prices. This allows 0-fee transactions for non-EVM transactions if validators accept them. EVM transactions cannot have 0 fees as gas is inherently required by the EVM (validated in ValidateBasic and custom AnteHandler).

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Cross-Chain Gas and Fees

For cross-chain scenarios (e.g., IBC transfer from Chain A to Cosmos EVM without native tokens), Cosmos SDK Tips allow users to:
  • Sign transaction with tip and no fees
  • Send to fee relayer who covers fees in native currency
  • Receive tip in payment (intermediary exchange behavior)