# Gas Fee Model

Otto Chain has introduced [EIP-1559](https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md) as similar to Ethereum, which calculates transaction fees as follows:

fee = (baseFee + priorityTip) \* gasLimit

However, the Cosmos SDK currently does not have the concept of transaction prioritisation when packing transactions. Therefore, the priorityTip for an EIP-1559 transaction is set to 0 on the Otto Chain. Additionally, unlike the gas burning mechanism on Ethereum, the gas generated on the Otto Chain is used for regular [Cosmos SDK fee distribution.](https://docs.cosmos.network/main/modules/distribution)

For more information, please refer to the [feemarket](https://docs.evmos.org/protocol/modules/feemarket) documentation.

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