The Crypto Fee Paradox: Why No One Protests

In my previous article, I covered cryptocurrencies with fixed or zero transaction fees and mentioned IOTA — a network originally designed to enable feeless transfers.

Just a few days later, I received a surprising comment on X:

Naturally, I had to double-check.

At Rabbit Swap, we support the network’s native token under two tickers:

• MIOTA, as listed on the Nasdaq’s website and on some exchanges,
• and IOTA, as referred to on the project’s official site.

But regardless of the name, the token has seen virtually zero user activity. Even though rabbit.io has the best rates, no limits, instant exchanges without registration, and we process many other coins and tokens daily, the IOTA network token is rarely requested. In fact, I can’t remember the last time we exchanged it.

So I went straight to the IOTA block explorer. And there it was: every transaction carried a gas fee.

Wait… how did that happen? If you’ve been around since the days when IOTA was a top-10 cryptocurrency, you probably remember what made it special: no transaction fees. That was its whole selling point.

So how did gas fees sneak in without anyone noticing? No backlash, no headlines, no angry YouTube videos?

I turned to AI for answers — just like the commenter who tagged @AskPerplexity under my original post. But Perplexity didn’t confirm anything. So I asked several other language models.

Every one of them insisted that IOTA still had feeless transactions. Even when I showed them a screenshot from the block explorer clearly displaying gas fees, they made excuses — blaming quirks of the UI, or suggesting it was “only for smart contracts” — anything but admitting that the fee-free era was over.

Why? Because these models were trained on web content. And the web is full of outdated articles praising IOTA’s feeless design — but no one ever wrote a high-profile piece when that changed.

Which leads to a striking conclusion: apparently, no one cared enough to document the end of feeless IOTA. Not the community, not the media, not even the critics.

How IOTA Introduced Transaction Fees

From 2016 to 2025, the IOTA network only supported one thing: transferring tokens. It did that fast and free, which made it stand out in a crowded crypto landscape.

But in May 2025, the IOTA protocol underwent a radical transformation with the launch of IOTA Rebased — a major upgrade that added support for smart contracts. And with that came gas fees.

The decision to abandon the feeless model wasn’t an accident. It was a conscious trade-off: you can either have zero-fee transfers, or full-fledged programmability — but not both, at least not in a way that scales securely. IOTA chose programmability.

The community went along with it. By 2025, IOTA had already faded from the mainstream conversation. Few newcomers even knew what it was, and those who stuck around had already accepted the pivot quietly in private chats and forums.

The IOTA Foundation helped cushion the shift. They acknowledged that the move was “a departure from … long-standing principles as an alternative to fee-based models” — but emphasized that “demand for further fee reductions has all but disappeared.” What users and partners actually wanted was functionality: real smart contracts, staking, flexibility.

To soften the blow, the Foundation promised:

• ultra-low fees,
• a burn mechanism to offset supply,
• and staking rewards that could cover users’ costs.

And most importantly, they introduced IOTA Gas Stations — allowing apps to cover gas fees on behalf of users. So even though fees became part of the protocol, the user experience remained nearly fee-free.

As for the rest of the crypto world? They had long since moved on from IOTA. No headlines, no debates. Just silence.

EOS (Vaulta) and NEO: When Free Transactions Stop Mattering

Similar stories unfolded in other networks, like EOS and NEO, where users could once make basic transfers without paying any fees.

EOS: Free Until You Use Ethereum Tools

From the very beginning, EOS was marketed as a zero-fee platform. There were no per-transaction fees — instead, users needed to stake tokens to access network resources. This was kind of like a “non-withdrawable bank balance”: as long as you kept a certain amount locked up, you could use the network freely. The only truly “paid” operation was the final one — when you wanted to unstake and withdraw your tokens.

In 2018, this model made EOS stand out, especially compared to Ethereum’s sky-high gas fees. But over time, EOS lost momentum — and just like IOTA, it faded from relevance.

In 2023–2024, the project reinvented itself. The community forked away from the original team and began a major revamp. One major addition was EOS EVM — a virtual machine compatible with Ethereum. And inside this EVM, transactions are fee-based, just like on Ethereum.

In July 2024, EOS EVM adopted EIP-1559, introducing base fees and priority tips. Then in March 2025, EOS rebranded as Vaulta, with a new focus on DeFi and Web3 banking.

But here’s the key part: Vaulta kept the original fee-free model for its native layer. Users can still access resources by staking the A token (formerly EOS), and don’t need to pay per-transaction fees unless they’re using the EVM. That EVM is opt-in — not forced — and no one complained about it. Why would they?

Interestingly, Vaulta no longer promotes feeless transactions as its flagship feature. Instead, it highlights things like Bitcoin integration (via the exSat module) and real-world use cases. Apparently, feeless design is no longer a marketing hook. And honestly, if Vaulta did start charging a small base fee, it’s hard to imagine anyone raising a fuss.

NEO: From Zero Fees to Spam Defense

Another telling case is NEO. Until fall 2021, NEO supported free transfers of its native token. But with the launch of the upgraded Neo N3 network, that changed. From then on, every transaction required a fee, even if small.

The team explained that free transactions opened the door to spam attacks. Most users accepted the change without protest. And those who didn’t could still use Neo Legacy (N2) — where the old rules and zero-fee transfers remained functional.

Even today, it’s technically possible to send NEO without paying a fee — on the old chain. But no one’s really there anymore. To verify that NEO Legacy was still functioning, I found a recent transaction where the sender and recipient were the same address — likely just a test to see if transfers still work.

Bitcoin and Lightning Network: When Free Was Real — Then Gone

In Bitcoin’s early years, free transactions were real. Blocks were often half-empty, and miners were willing to include pretty much any transaction — no fees required. Back then, fees were more of a voluntary donation than a necessity.

But as the network grew busier, this model became unsustainable. At first, nodes introduced a recommended minimum fee. Then, Bitcoin Core added a hard relay fee — a threshold below which transactions wouldn’t be broadcast across the network.

Today, nearly all nodes reject zero-fee transactions. Technically, you can still create one — but it won’t be relayed, and miners won’t see it. Unless, of course, you’re a miner yourself, and include your own transaction in a block. But for normal users, free Bitcoin transfers are a thing of the past.

What’s remarkable is how smoothly this shift happened. There was no massive uproar. No revolt.

Yes, users complained when fees spiked to dozens or even hundreds of sats per byte. But the outrage wasn’t about having to pay at all — it was about paying too much. If anything, users began to see fees as a spam deterrent, a necessary evil to keep the network from collapsing under junk traffic.

Rather than demand a return to zero-fee Bitcoin, the community sought solutions:

• sidechains,
• new protocols like Ark and Spark,
• and most notably, the Lightning Network.

And that brings us to yet another evolution. In its early days, Lightning was almost entirely free to use. Routing nodes would forward payments without charging fees, just to encourage adoption.

If you’re not familiar with how the Lightning Network works, I recommend checking out my article. Here, I’ll just focus on one particular aspect: in this network, we always send bitcoins to our direct contacts, who then forward them to their contacts, and so on — until the coins reach the final recipient. With this kind of architecture, there’s a risk that liquidity will gradually accumulate at a single, dominant payment recipient, at which point the entire network could effectively grind to a halt.

In practice, that dominant recipient tends to be centralized exchanges. Users send bitcoin to CEXes via the Lightning Network because these transactions aren’t publicly traceable, so exchanges have no reason to block them based on tainted history. But hardly anyone withdraws funds from exchanges back into Lightning. Instead, users usually withdraw on-chain — because bitcoin received from a CEX is assumed to be clean by default, and rarely causes any issues.

Over time, this creates liquidity imbalance: sats flow toward exchanges and get stuck. By introducing routing fees, operators can make one-way traffic more expensive, which helps discourage network imbalances and keep Lightning functional.

So, even in Lightning — the last stronghold of free Bitcoin transfers — fees have quietly become essential infrastructure, and users simply accepted that.

So Why Are People So Quick to Let Go of “Free”?

In every case, the introduction of transaction fees had a solid rationale behind it. Users understood that these fees weren’t being added as a cash grab — they were introduced only when the network couldn’t realistically evolve without them (as in IOTA, EOS, and Lightning). And in cases like Bitcoin mainnet or Neo, the networks technically could keep running without fees — but the community recognized that zero-fee models created vulnerabilities, which would inevitably be exploited over time.

So why is the crypto community so willing to give up on “free”? Because everything in this space is built on incentives. And one of the core beliefs that has taken root in crypto culture is this:

“Nothing that’s truly free can be sustainable.”

Fees, then, aren’t viewed as a betrayal — they’re seen as a necessary part of a healthy, self-sustaining economy.

And beyond that, priorities have shifted. Back in 2017–2018, the idea of zero-fee transfers in IOTA, NEO, or EOS genuinely thrilled users. Today, the real competition happens elsewhere:

• in smart contract functionality,
• in DeFi integrations,
• in NFT infrastructure,
• in real-world adoption,
• and in decentralization and validator incentives.

In this new landscape, no one is excited about “feeless transfers” anymore. They’re excited about what a network can do.

That’s why no one cared when IOTA added gas fees — they cared that it finally supported on-chain smart contracts and dropped the coordinator. That’s why EOS got away with adding fees in its EVM. And that’s why Lightning’s transition to fee-based routing was quietly accepted.

Besides, the use cases that truly require zero-fee transactions are few and far between. Even in micropayments, micro-fees work just fine — no one notices the difference.

So yes, some networks still offer feeless transfers — Nano, Vaulta, Tron, Hive — but hardly anyone talks about it, and even fewer people use them because of that feature.

The dream of truly feeless crypto lives on. But the market has spoken:

Functionality wins. “Free” is optional.