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IIRC, the fee of a rejected / backtracked transactions is debited from the sender account. What happens to those tez? Are they burned? Do they go to the baker even though the transaction wasn't included in the block?

Thanks!

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As Raphaël mentioned, the fees go to the baker that includes that non-applied (failed/backtracked/skipped) operation into the block it baked. Those operations are included in the blockchain! But they're not applied.

It's normal that you do not want to pay for operations that fail. You should run simulations before you make an operation that might fail. You should use testnets to make operations that don't cost you any tez.

Operations that fully fail to be included in any block don't cost you anything. There are two scenarii:

  1. your operation just never gets picked by any baker, so it's never baked, so it's never in any block. That doesn't cost you any tez.
  2. your operation is baked into a block, the block is included into the blockchain, but a reorganization happens and that block disappears (because consensus picked another concurrent block). In such case it's like that operation (and the whole block) just never happened. It's possible that the operation has ended up in another block. It's possible that the operation has fully disappeared and you have to re-do everything.

(I wanted to write just a comment but I'm not allowed.)

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Do they go to the baker even though the transaction wasn't included in the block?

Rejected transactions can be included in blocks, and yes the fees go to the baker including them.

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