What Is the Relationship between the Mempool Size and the Average Transaction Fee?
The mempool is the waiting area for unconfirmed transactions. When the mempool size increases (meaning there is network congestion and more transactions are waiting), the average transaction fee tends to rise.
This is because miners prioritize transactions with higher fees to maximize their block reward, creating a competitive bidding market among users for block space.
Glossar
Network Congestion
Latency ⎊ Network congestion within cryptocurrency, options trading, and financial derivatives manifests as increased latency, directly impacting execution speeds and potentially leading to adverse selection against slower participants.
Competitive Bidding
Framework ⎊ Competitive bidding, within cryptocurrency derivatives, options trading, and financial derivatives, establishes a structured process for price discovery and order execution, particularly relevant in markets characterized by high volatility and complex instruments.