Solana's Local Fee Markets: A New Approach to Congestion Management
Solana's local fee markets are an innovative feature that allows the network to manage congestion more effectively. Unlike other blockchains, Solana does not treat all transactions as competing for the same scarce resource. Instead, it uses its account-based execution model to make congestion local to the state being contested.
This means that when one application becomes extremely popular and attracts enormous demand, only those users interacting with that application's accounts will face higher fees. Unrelated transactions touching different accounts will not be affected by the same contention.
The Solana network exposes compute-budget instructions that let developers specify a compute-unit limit and a price per compute unit. This allows for more precise control over resource requirements, reducing unnecessary costs and giving the scheduler a better understanding of the transaction's needs.
Local fee markets are not a free lunch, however. They do not create additional execution capacity; they simply make competition more targeted. As with any scalable system, there will always be limitations on how much work can be processed in parallel. Solana's account model takes this into consideration by partitioning application state across independent accounts, allowing for better concurrency.