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 | **Sponsor**   | Kshitij Chaudhary (kshitij.chaudhary@dapperlabs.com) |
 | **Updated**   | 2023-03-23                                           |
 
+## **Update 7/24/25 **
+_This FLIP will no longer be pursued and is being formally withdrawn.
+In its place, a new FLIP focused on Surge Pricing is being introduced to establish a more dynamic and sustainable fee mechanism on Flow. This upcoming FLIP will better reflect current network conditions and long-term tokenomics goals, while keeping base fees unchanged in the near term.
+We look forward to engaging the community on the Surge Pricing proposal soon!_
+
 ## **Introduction**
 
 In October 2021, with [FLIP-660](https://github.com/onflow/flow/blob/c05d847adf2f6fb509e42c17020484d7dd3e89bd/flips/20211007-transaction-fees.md) it was determined that the transaction fees on Flow should be proportional to the cost of effort to the network imposed by deployment of resources such as CPU and bandwidth. Fees were broken down into [three components](https://developers.flow.com/learn/concepts/variable-transaction-fees) - ‘*Inclusion Fee*’ that accounts for the resources required to process a transaction due to the transaction’s core properties (byte size, number of signatures); ‘Execution Fee’ that accounts for the operational cost of running the transaction script, processing the results, sending results for verification, generating verification receipt, etc; and a *Surge* factor as a multiplicative factor to dynamically account for network pressure and market conditions.