What Is a Priority Fee?

A priority fee is an optional, additional payment added to a blockchain transaction to ensure faster processing — particularly during periods of high demand on the network.

How Priority Fees Work

When a blockchain network like Ethereum or Solana becomes congested, thousands of pending transactions compete for limited block space. Validators and miners naturally select transactions that offer the highest reward. By attaching a priority fee, you signal to the network that your transaction is urgent, increasing the probability it gets confirmed in the next block.

By offering a higher priority fee, a user signals to the network's validators that their transaction is a priority, encouraging its inclusion in an upcoming block.

Priority Fee vs Base Fee

On Ethereum (post EIP-1559), every transaction pays a mandatory base fee that is algorithmically set and burned. The priority fee — also called the miner tip — is entirely optional and paid directly to the validator. Together they form the total gas cost you pay. On Solana, the priority fee is calculated as the product of the compute unit price and the compute unit limit, expressed in micro-lamports.

Priority fees are particularly valuable in time-sensitive scenarios: DeFi arbitrage opportunities close within seconds, NFT mints sell out in one block, and liquidation positions must be triggered before collateral thresholds are breached. In each case, paying a slightly higher priority fee can be the difference between a successful transaction and a missed opportunity.