Section II: Transactions, Fees, and UX

The Transaction Model

Each transaction includes a message (which contains the account list, instructions, and recent blockhash) along with the required Ed25519 signatures (Ed25519 is a modern digital signature algorithm known for its speed and security). Every transaction pays a base fee of 5,000 lamports, roughly one tenth of a cent per signature. Users can also attach a compute budget and pay priority fees per compute unit, essentially trading cost for faster processing. These compute unit caps serve two purposes: they enforce fairness across users and help the scheduler predict execution time for optimal parallelization.

Fee policy has evolved significantly. Priority fees go entirely to the current leader (the validator producing the current block), while base fees are split between burning and validator rewards (detailed in Section IV). The critical innovation here is local fee markets, which price congestion at the account level rather than across the entire network. Ethereum's global fee market (Chapter II) works differently: all transactions compete for the same block space regardless of which contracts they interact with. Ideally, local fee markets mean heavily congested accounts pay more without degrading performance for the rest of the network. In practice, the current implementation is imperfect. During extreme spam events in 2024 and 2025, congested traffic still degraded global performance and caused elevated dropped-transaction rates.

Solana also offers preflight simulation, which lets developers and users preview what a transaction will do before actually submitting it. Combined with detailed program logs, this allows wallets to show users the expected outcome of a transaction before they commit to it, improving both safety and user experience.

It's important to distinguish "dropped" transactions from "failed" ones. Dropped transactions never reach a block due to network overload, insufficient priority fees, or expired blockhashes, and they leave no on-chain record. Failed transactions are actually processed and included in a block but revert due to program logic errors or unmet conditions (like excessive slippage). In practice, users and applications mitigate dropped transactions by retrying with higher priority fees or using services that forward transactions to multiple leaders.

The User Experience Advantage

These technical mechanics create a distinctively different user experience: users interact with one global state, a cohesive ecosystem of explorers and wallets, and atomic composability across the whole network. Users can compose multiple protocol interactions within a single transaction that either succeeds completely or fails completely, with no partial executions and no stuck funds. The result is fewer context switches and less UX friction compared to navigating fragmented multi-chain ecosystems.

The economic impact matters most. Sub-cent transaction costs allow entirely different user behaviors than networks with dollar-plus fees. Users can execute rapid position changes, experiment with small-ticket speculation, and interact with applications multiple times per session without fee anxiety. This economic accessibility, combined with near-instant transaction processing, has enabled particular use cases to flourish on Solana, most notably memecoin trading and high-frequency DeFi applications.

The network has evolved considerably through operational challenges. Early Solana suffered from congestion-related outages that critics frequently highlighted. Notably, in February 2024, Solana experienced an outage lasting roughly five hours, caused by a bug in the program loader's cache. However, systematic upgrades to networking, block propagation, and runtime performance have significantly reduced both the frequency and severity of these issues, delivering increased inclusion rates and overall reliability.

The fast confirmations users experience, along with the inclusion behavior described above, are direct consequences of the consensus, scheduling, and networking stack operating beneath the surface.