diff --git a/src/L2/L2SystemConfig.sol b/src/L2/L2SystemConfig.sol
new file mode 100644
index 00000000..c79c9b2b
--- /dev/null
+++ b/src/L2/L2SystemConfig.sol
@@ -0,0 +1,81 @@
+// SPDX-License-Identifier: MIT
+
+pragma solidity =0.8.24;
+
+import {OwnableUpgradeable} from "@openzeppelin/contracts-upgradeable/access/OwnableUpgradeable.sol";
+
+contract L2SystemConfig is OwnableUpgradeable {
+    /**********
+     * Events *
+     **********/
+
+    /// @notice Emitted when the base fee overhead is updated.
+    /// @param oldBaseFeeOverhead The old base fee overhead.
+    /// @param newBaseFeeOverhead The new base fee overhead.
+    event BaseFeeOverheadUpdated(uint256 oldBaseFeeOverhead, uint256 newBaseFeeOverhead);
+
+    /// @notice Emitted when the base fee scalar is updated.
+    /// @param oldBaseFeeScalar The old base fee scalar.
+    /// @param newBaseFeeScalar The new base fee scalar.
+    event BaseFeeScalarUpdated(uint256 oldBaseFeeScalar, uint256 newBaseFeeScalar);
+
+    /*************
+     * Constants *
+     *************/
+
+    uint256 private constant PRECISION = 1e18;
+
+    /*********************
+     * Storage Variables *
+     *********************/
+
+    /// @notice The base fee overhead. This is part of the L2 base fee calculation.
+    uint256 public baseFeeOverhead;
+
+    /// @notice The base fee scalar. This is part of the L2 base fee calculation.
+    uint256 public baseFeeScalar;
+
+    /***************
+     * Constructor *
+     ***************/
+
+    constructor() {
+        _disableInitializers();
+    }
+
+    function initialize(address _owner) external initializer {
+        __Ownable_init();
+        transferOwnership(_owner);
+    }
+
+    /*************************
+     * Public View Functions *
+     *************************/
+
+    /// @notice Calculates the L2 base fee based on the L1 base fee.
+    /// @param l1BaseFee The L1 base fee.
+    /// @return l2BaseFee The L2 base fee.
+    function getL2BaseFee(uint256 l1BaseFee) public view returns (uint256 l2BaseFee) {
+        l2BaseFee = (l1BaseFee * baseFeeScalar) / PRECISION + baseFeeOverhead;
+    }
+
+    /************************
+     * Restricted Functions *
+     ************************/
+
+    /// @notice Updates the base fee overhead.
+    /// @param _baseFeeOverhead The new base fee overhead.
+    function updateBaseFeeOverhead(uint256 _baseFeeOverhead) external onlyOwner {
+        uint256 oldBaseFeeOverhead = baseFeeOverhead;
+        baseFeeOverhead = _baseFeeOverhead;
+        emit BaseFeeOverheadUpdated(oldBaseFeeOverhead, _baseFeeOverhead);
+    }
+
+    /// @notice Updates the base fee scalar.
+    /// @param _baseFeeScalar The new base fee scalar.
+    function updateBaseFeeScalar(uint256 _baseFeeScalar) external onlyOwner {
+        uint256 oldBaseFeeScalar = baseFeeScalar;
+        baseFeeScalar = _baseFeeScalar;
+        emit BaseFeeScalarUpdated(oldBaseFeeScalar, _baseFeeScalar);
+    }
+}
diff --git a/src/test/L2SystemConfig.t.sol b/src/test/L2SystemConfig.t.sol
new file mode 100644
index 00000000..465ea37d
--- /dev/null
+++ b/src/test/L2SystemConfig.t.sol
@@ -0,0 +1,132 @@
+// SPDX-License-Identifier: MIT
+
+pragma solidity =0.8.24;
+
+import {Test} from "forge-std/Test.sol";
+
+import {TransparentUpgradeableProxy} from "@openzeppelin/contracts/proxy/transparent/TransparentUpgradeableProxy.sol";
+
+import {L2SystemConfig} from "../L2/L2SystemConfig.sol";
+
+contract L2SystemConfigTest is Test {
+    address public admin;
+    address public owner;
+    address public nonOwner;
+
+    L2SystemConfig public l2SystemConfig;
+
+    event BaseFeeOverheadUpdated(uint256 oldBaseFeeOverhead, uint256 newBaseFeeOverhead);
+    event BaseFeeScalarUpdated(uint256 oldBaseFeeScalar, uint256 newBaseFeeScalar);
+
+    function setUp() public {
+        admin = makeAddr("admin");
+        owner = makeAddr("owner");
+        nonOwner = makeAddr("nonOwner");
+
+        L2SystemConfig implementation = new L2SystemConfig();
+        address proxy = address(new TransparentUpgradeableProxy(address(implementation), admin, ""));
+        l2SystemConfig = L2SystemConfig(proxy);
+
+        l2SystemConfig.initialize(owner);
+    }
+
+    function test_Initialize() public {
+        // Test initialization
+        assertEq(l2SystemConfig.owner(), owner);
+
+        // revert when initialize again
+        vm.expectRevert("Initializable: contract is already initialized");
+        l2SystemConfig.initialize(owner);
+    }
+
+    function test_UpdateBaseFeeOverhead(uint256 newBaseFeeOverhead) public {
+        // Test that only owner can update base fee overhead
+        vm.prank(nonOwner);
+        vm.expectRevert("Ownable: caller is not the owner");
+        l2SystemConfig.updateBaseFeeOverhead(newBaseFeeOverhead);
+
+        // Test owner can update base fee overhead
+        assertEq(l2SystemConfig.baseFeeOverhead(), 0);
+        vm.prank(owner);
+        vm.expectEmit(true, true, true, true);
+        emit BaseFeeOverheadUpdated(0, newBaseFeeOverhead);
+        l2SystemConfig.updateBaseFeeOverhead(newBaseFeeOverhead);
+        assertEq(l2SystemConfig.baseFeeOverhead(), newBaseFeeOverhead);
+    }
+
+    function test_UpdateBaseFeeScalar(uint256 newBaseFeeScalar) public {
+        // Test that only owner can update base fee scalar
+        vm.prank(nonOwner);
+        vm.expectRevert("Ownable: caller is not the owner");
+        l2SystemConfig.updateBaseFeeScalar(newBaseFeeScalar);
+
+        // Test owner can update base fee scalar
+        assertEq(l2SystemConfig.baseFeeScalar(), 0);
+        vm.prank(owner);
+        vm.expectEmit(true, true, true, true);
+        emit BaseFeeScalarUpdated(0, newBaseFeeScalar);
+        l2SystemConfig.updateBaseFeeScalar(newBaseFeeScalar);
+        assertEq(l2SystemConfig.baseFeeScalar(), newBaseFeeScalar);
+    }
+
+    function test_GetL2BaseFee(
+        uint256 l1BaseFee,
+        uint256 baseFeeScalar,
+        uint256 baseFeeOverhead
+    ) public {
+        l1BaseFee = bound(l1BaseFee, 0, type(uint64).max);
+        baseFeeScalar = bound(baseFeeScalar, 0, type(uint128).max);
+        baseFeeOverhead = bound(baseFeeOverhead, 0, type(uint128).max);
+
+        // Set up the contract state
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeScalar(baseFeeScalar);
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeOverhead(baseFeeOverhead);
+
+        // Calculate expected L2 base fee
+        uint256 expectedL2BaseFee = (l1BaseFee * baseFeeScalar) / 1e18 + baseFeeOverhead;
+
+        // Test getL2BaseFee function
+        uint256 actualL2BaseFee = l2SystemConfig.getL2BaseFee(l1BaseFee);
+        assertEq(actualL2BaseFee, expectedL2BaseFee);
+    }
+
+    function test_GetL2BaseFeeWithZeroL1BaseFee() public {
+        uint256 l1BaseFee = 0;
+        uint256 baseFeeScalar = 2000;
+        uint256 baseFeeOverhead = 1000;
+
+        // Set up the contract state
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeScalar(baseFeeScalar);
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeOverhead(baseFeeOverhead);
+
+        // Calculate expected L2 base fee
+        uint256 expectedL2BaseFee = baseFeeOverhead; // When L1 base fee is 0, only overhead is added
+
+        // Test getL2BaseFee function
+        uint256 actualL2BaseFee = l2SystemConfig.getL2BaseFee(l1BaseFee);
+        assertEq(actualL2BaseFee, expectedL2BaseFee);
+    }
+
+    function test_GetL2BaseFeeWithLargeValues() public {
+        uint256 l1BaseFee = 1e18; // 1 ETH
+        uint256 baseFeeScalar = 2e18; // 2x multiplier
+        uint256 baseFeeOverhead = 1e17; // 0.1 ETH
+
+        // Set up the contract state
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeScalar(baseFeeScalar);
+        vm.prank(owner);
+        l2SystemConfig.updateBaseFeeOverhead(baseFeeOverhead);
+
+        // Calculate expected L2 base fee
+        uint256 expectedL2BaseFee = (l1BaseFee * baseFeeScalar) / 1e18 + baseFeeOverhead;
+
+        // Test getL2BaseFee function
+        uint256 actualL2BaseFee = l2SystemConfig.getL2BaseFee(l1BaseFee);
+        assertEq(actualL2BaseFee, expectedL2BaseFee);
+    }
+}