Transaction Cost

To protect the Ripple Consensus Ledger from being disrupted by spam and denial-of-service attacks, each transaction must destroy a small amount of XRP. This transaction cost is designed to increase along with the load on the network, making it very expensive to deliberately or inadvertently overload the network.

Every transaction must specify how much XRP to destroy to pay the transaction cost.

Current Transaction Cost

The current minimum transaction cost required by the network for a standard transaction is 0.00001 XRP (10 drops). It sometimes increases due to higher than usual load.

You can also query rippled for the current transaction cost.

Special Transaction Costs

Some transactions have different transaction costs:

Transaction	Cost Before Load Scaling
Reference Transaction (Most transactions)	10 drops
Key Reset Transaction	0
Multi-signed transaction	10 drops × (1 + Number of Signatures Provided)

Beneficiaries of the Transaction Cost

The transaction cost is not paid to any party: the XRP is irrevocably destroyed. Since no new XRP can ever be created, this makes XRP more scarce and benefits all holders of XRP by making XRP more valuable.

Load Cost and Open Ledger Cost

When the FeeEscalation amendment is enabled, there are two thresholds for the transaction cost:

If the transaction cost does not meet a rippled server's load-based transaction cost threshold, the server ignores the transaction completely. (This logic is essentially unchanged with or without the amendment.)
If the transaction cost does not meet a rippled server's open ledger cost threshold, the server queues the transaction for a later ledger.

This divides transactions into roughly three categories:

Transactions that specify a transaction cost so low that they get rejected by the load-based transaction cost.
Transactions that specify a transaction cost high enough to be included in the current open ledger.
Transactions in between, which get queued for a later ledger version.

Local Load Cost

Each rippled server maintains a cost threshold based on its current load. If you submit a transaction with a Fee value that is lower than current load-based transaction cost of the rippled server, that server neither applies nor relays the transaction. (Note: If you submit a transaction through an admin connection, the server applies and relays the transaction as long as the transaction meets the un-scaled minimum transaction cost.) A transaction is very unlikely to survive the consensus process unless its Fee value meets the requirements of a majority of servers.

Open Ledger Cost

The rippled server has a second mechanism for enforcing the transaction cost, called the open ledger cost. A transaction can only be included in the open ledger if it meets the open ledger cost requirement in XRP. Transactions that do not meet the open ledger cost may be queued for a following ledger instead.

For each new ledger version, the server picks a soft limit on the number of transactions to be included in the open ledger, based on the number of transactions in the previous ledger. The open ledger cost is equal to the minimum un-scaled transaction cost until the number of transactions in the open ledger is equal to the soft limit. After that, the open ledger cost increases exponentially for each transaction included in the open ledger. For the next ledger, the server increases the soft limit if the current ledger contained more transactions than the soft limit, and decreases the soft limit if the consensus process takes more than 5 seconds.

The open ledger cost requirement is proportional to the normal cost of the transaction, not the absolute transaction cost. Transaction types that have a higher-than-normal requirement, such as multi-signed transactions must pay more to meet the open ledger cost than transactions which have minimum transaction cost requirements.

Queued Transactions

When rippled receives a transaction that meet the server's local load cost but not the open ledger cost, the server estimates whether the transaction is "likely to be included" in a later ledger. If so, the server adds the transaction to the transaction queue and relays the transaction to other members of the network. Otherwise, the server discards the transaction. The server tries to minimize the amount of network load caused by transactions that would not pay a transaction cost, since the transaction cost only applies when a transaction is included in a validated ledger.

When the current open ledger closes and the server starts a new open ledger, the server starts taking transactions from the queue to include in the new open ledger. The transaction queue is sorted with the transactions that would pay the highest transaction cost first, proportional to the reference cost of those transactions. Transactions that pay the same transaction cost are queued in the order the server receives them.

Note: When rippled queues a transaction, the provisional transaction response code is terQUEUED. This means that the transaction is likely to succeed in a future. As with all provisional response codes, the outcome of the transaction is not final until the transaction is either included in a validated ledger, or rendered permanently invalid.

Queuing Restrictions

The rippled server uses a variety of heuristics to estimate which transactions are "likely to be included in a ledger." The current implementation uses the following rules to decide which transactions to queue:

Transactions must be properly-formed and authorized with valid signatures.
Transactions with an AccountTxnID field cannot be queued.
A single sending address can have at most 10 transactions queued at the same time. In order for a transaction to be queued, the sender must have enough XRP to pay all the XRP costs of all the sender's queued transactions including both the Fee fields and the sum of the XRP that each transaction could send.
If a transaction affects how the sending address authorizes transactions, no other transactions from the same address can be queued behind it.
If the transaction includes a LastLedgerSequence field, the value of that field must be at least the current ledger index + 2.

Fee Averaging

If a sending address has one or more transactions queued, that sender can "push" the existing queued transactions into the open ledger by submitting a new transaction with a high enough transaction cost to pay for all of them. Specifically, the new transaction must increase the total transaction cost of the queued transactions from the same sending address, including the new transaction, to cover the open ledger cost of each transaction as it gets added to the ledger. The total must include the increased open ledger cost for each new transaction. The transactions must still follow the other queuing restrictions and the sending address must have enough XRP to pay the transaction costs of all the queued transactions.

This feature helps you work around a particular situation. If you submitted one or more transactions with a low cost, which got queued, you cannot send new transactions from the same address unless you do one of the following:

Wait for the queued transactions to be included in a validated ledger, or
Wait for the queued transactions to be permanently invalidated if the transactions have the LastLedgerSequence field set, or
Cancel the queued transactions by submitting a new transaction with the same sequence number.

If none of the above occur, transactions can stay in the queue for a theoretically unlimited amount of time, while other senders can "cut in line" by submitting transactions with higher transaction costs. Since signed transactions are immutable, you cannot increase the transaction cost of the queued transactions to increase their priority. If you do not want to invalidate the previously submitted transactions, fee averaging provides a workaround. If you increase the transaction cost of your new transaction to compensate, you can ensure the queued transactions are included in an open ledger right away.

Reference Transaction Cost

The "Reference Transaction" is the cheapest (non-free) transaction, in terms of the necessary transaction cost before load scaling. Most transactions have the same cost as the reference transaction. Some transactions, such as multi-signed transactions, require a multiple of this cost instead. When the open ledger cost escalates, the requirement is proportional to the basic cost of the transaction.

Fee Levels

Fee levels represent the proportional difference between the minimum cost and the actual cost of a transaction. The Open Ledger Cost is measured in fee levels instead of absolute cost. See the following table for a comparison:

Transaction	Minimum cost in drops	Minimum cost in Fee levels	Double cost in drops	Double cost in fee levels
Reference transaction (most transactions)	10	256	20	512
Multi-signed transaction with 4 signatures	50	256	100	512
Key reset transaction	0	(Effectively infinite)	N/A	(Effectively infinite)

Querying the Transaction Cost

The rippled APIs have two ways to query the local load-based transaction cost: the server_info command (intended for humans) and the server_state command (intended for machines).

If the FeeEscalation amendment is enabled, you can use the fee command to check the open ledger cost.

server_info

The server_info command reports the unscaled minimum XRP cost, as of the previous ledger, as validated_ledger.base_fee_xrp, in the form of decimal XRP. The actual cost necessary to relay a transaction is scaled by multiplying that base_fee_xrp value by the load_factor parameter in the same response, which represents the server's current load level. In other words:

Current Transaction Cost in XRP = base_fee_xrp × load_factor

server_state

The server_state command returns a direct representation of rippled's internal load calculations. In this case, the effective load rate is the ratio of the current load_factor to the load_base. The validated_ledger.base_fee parameter reports the minimum transaction cost in drops of XRP. This design enables rippled to calculate the transaction cost using only integer math, while still allowing a reasonable amount of fine-tuning for server load. The actual calculation of the transaction cost is as follows:

Current Transaction Cost in Drops = (base_fee × load_factor) ÷ load_base

Specifying the Transaction Cost

Every signed transaction must include the transaction cost in the Fee field. Like all fields of a signed transaction, this field cannot be changed without invalidating the signature.

As a rule, the Ripple Consensus Ledger executes transactions exactly as they are signed. (To do anything else would be difficult to coordinate across a decentralized consensus network, at the least.) As a consequence of this, every transaction destroys the exact amount of XRP specified by the Fee field, even if the specified amount is much more than the current minimum transaction cost for any part of the network. The transaction cost can even destroy XRP that would otherwise be set aside for an account's reserve requirement.

Before signing a transaction, we recommend looking up the current load-based transaction cost. If the transaction cost is high due to load scaling, you may want to wait for it to decrease. If you do not plan on submitting the transaction immediately, we recommend specifying a slightly higher transaction cost to account for future load-based fluctuations in the transaction cost.

Automatically Specifying the Transaction Cost

When you sign a transaction online, you can omit the Fee field. In this case, rippled or RippleAPI checks the state of the peer-to-peer network for the current requirement and adds a Fee value before signing the transaction. However, there are several drawbacks and limitations to automatically filling in the transaction cost in this manner:

If the network's transaction cost goes up between signing and distributing the transaction, the transaction may not be confirmed.
- In the worst case, the transaction may be stuck in a state of being neither definitively confirmed or rejected, unless it included a LastLedgerSequence parameter or until you cancel it with a new transaction that uses the same Sequence number. See reliable transaction submission for best practices.
You do not know in advance exactly what value you are signing for the Fee field.
- If you are using rippled, you can also use the fee_mult_max and fee_div_max parameters of the sign command to set a limit to the load scaling you are willing to sign.
You cannot look up the current transaction cost from an offline machine.
You cannot automatically specify the transaction cost when multi-signing.

Transaction Costs and Failed Transactions

Since the purpose of the transaction cost is to protect the Ripple peer-to-peer network from excessive load, it should apply to any transaction that gets distributed to the network, regardless of whether or not that transaction succeeds. However, to affect the shared global ledger, a transaction must be included in a validated ledger. Thus, rippled servers try to include failed transactions in ledgers, with tec status codes ("tec" stands for "Transaction Engine - Claimed fee only").

The transaction cost is only debited from the sender's XRP balance when the transaction actually becomes included in a validated ledger. This is true whether the transaction is considered successful or fails with a tec code.

If a transaction's failure is final, the rippled server does not relay it to the network. The transaction does not get included in a validated ledger, so it cannot have any effect on anyone's XRP balance.

Insufficient XRP

When a rippled server initially evaluates a transaction, it rejects the transaction with the error code terINSUF_FEE_B if the sending account does not have a high enough XRP balance to pay the XRP transaction cost. Since this is a ter (Retry) code, the rippled server retries the transaction without relaying it to the network, until the transaction's outcome is final.

When a transaction has already been distributed to the network, but the account does not have enough XRP to pay the transaction cost, the result code tecINSUFF_FEE occurs instead. In this case, the account pays all the XRP it can, ending with 0 XRP. This can occur because rippled decides whether to relay the transaction to the network based on its in-progress ledger, but transactions may be dropped or reordered when building the consensus ledger.

Key Reset Transaction

As a special case, an account can send a SetRegularKey transaction with a transaction cost of 0, as long as the account's lsfPasswordSpent flag is disabled. This transaction must be signed by the account's master key pair. Sending this transaction enables the lsfPasswordSpent flag.

This feature is designed to allow you to recover an account if the regular key is compromised, without worrying about whether the compromised account has any XRP available. This way, you can regain control of the account before you send more XRP to it.

The lsfPasswordSpent flag starts out disabled. It gets enabled when you send a SetRegularKey transaction signed by the master key pair. It gets disabled again when the account receives a Payment of XRP.

When the FeeEscalation amendment is enabled, rippled prioritizes key reset transactions above other transactions even though the nominal transaction cost of a key reset transaction is zero.

Changing the Transaction Cost

The Ripple Consensus Ledger has a mechanism for changing the minimum transaction cost to account for long-term changes in the value of XRP. Any changes have to be approved by the consensus process. See Fee Voting for more information.