Burns

When a user makes a transaction on the network, the base fee is locked on a contract on Ramestta, while the priority fee is paid to the validator. This base fee will be split in 70% burned and 30% set aside to maintain the network.

Once a certain amount of RAMA (25,000) is accumulated in the burn contract, users can start the burn process from Ramestta. Once this process starts, accumulated RAMA are sent to Polygon's L1, where an automated swap for RAMA takes place, and this amount gets burned calling its contract function. It is comparable to a withdrawal transaction, but instead of receiving tokens, they are burned and taken out of the total supply.

Users will be able to use a specific portal on Ramestta's website for this process.

Anyone can initiate these burns by just clicking "Initiate burn", and they will need to complete the process by confirming a few transactions to allow the layer migration. Once the process is complete, RAMA tokens will be directly taken out of circulation and this will be reflected on the total max. supply.

What is the difference between base fee and priority fee?

The Base Fee is a crucial component of transaction fees on a blockchain. It represents the minimum amount that a transaction must pay in order to be considered valid. The Base Fee can fluctuate with each block and is influenced by the level of congestion in the network. Specifically, if the previous block is close to being full, the Base Fee will increase, and vice versa.

One key feature of the Base Fee is that it is burned, which means it is not paid to the block producer (such as a miner or validator). This helps to prevent the Base Fee from becoming a profit center for those who control the network. Instead, it ensures that the fee is used solely to prioritize transactions and maintain the security of the blockchain.

On the other side, the Priority Fee is the amount a transaction pays to a block producer when it gets included in a block. However, the Max Priority Fee is the maximum amount a transaction is willing to pay, as the block producer may choose to accept less. To limit the amount paid, a Max Gas Fee can be set, which is the total fee a transaction is willing to pay. The Priority Fee goes to the block producer who successfully includes the transaction in a block. This incentivizes validators to include transactions with higher Priority Fees in their blocks, as they will earn more rewards for doing so. Example:

Let's say the current base fee on the Ramestta network is X RAMA and the priority fee for a particular transaction is set at Y Rama. When a validator includes this transaction in a block, they will receive the Y Rama priority fee as a reward for including the transaction.

However, the X Rama base fee is not paid to the validator. Instead, it is converted into RAMA and burned, which means it is removed from circulation and effectively reduces the total supply of RAMA over time. This mechanism helps to prevent inflation and ensures that miners/validators do not have an incentive to artificially increase the base fee in order to earn more rewards.