- Celo Blockchain is focused in Usability.
- Gas Price Spikes make blockchain not usable.
- Ethereum many times is congested.
- Ethereum is not usable everyday because it has Price Spikes.
- Ethereum first-price blockchain auction allows for Price Spike.
- Spikes are generated by users disputing the for gas on congested blocks, the gas dispute severily impacts on price.
- EIP-1599 solves some issues, such as having an automed minimum price, but alledgedly will also have congestion severely impacting on gas price.
- When Celo blockchain will became congested it will became not usable.
- Ducht-auction/uniform-price block prices will allow to reduce congestion impacting on price, will impact but less dramatically.
- We need a simulator to test experimental auctions like Dutch/uniform-price.
Because the size of blocks in blockchain is limited by network propagation, the miners must have a way to choose which transactions go early and which ones can be left for later blocks [1]:
But here’s the problem: how does a miner prioritize among potential candidates to get into a block? If there are more candidate transactions than slots in a block, how do we decide what goes where? You might think a egalitarian approach is ideal: everyone is treated equally, and miners include transactions into blocks on a first-come-first-serve basis.
Current First-price Auction of transactions fees to be included a in a block in Ethereum is leading to price spikes under congestion scenarios [3]:
Ethereum’s existing gas prices respond to the relatively limited number of transactions that one can facilitate using a single block. Miners, in such a scenario, can choose the highest-priced transactions as their priority, so the result is an increase in effective gas prices.
A simulation tool for blockchain fees, aka gas market in Ethereum-type blockchains.
We want to compare at least the following strategies:
- Bitcoin/Ethereum standard First-price Auction.
- Ethereum EIP-1599, floating minimum gas-price, currently implemented in the Celo Blockchain.
- Experimental Dutch-auction strategies, also called uniform-price auction [5].
We plan to use syntethic data and also empiric registered data from transaction mempool, such as published by Blocknative [0].
Our focus is on Dutch-auction/uniform-price to prove that performs better on prices (prices are lower). We also assume that cricismd to Dutch-auction/uniform-price do not sustain[5]:
- Miner own transactions: if the miner includes its own transactions he can only move the price down he cannot raise the gas price if there are transactions for other people to be included in the block;
- Bribing attacks: the miner can influence transaction senders with bribes or refunds because 1$ change in one transaction can influence all the transactions in the block (> 1$ impact). These criticism do not sustain because to raise gas prices the miner must bribe or influence all the transactions to be included in the block.
[0] Evidence of Mempool Manipulation on Black Thursday: Hammerbots, Mempool Compression, and Spontaneous Stuck Transactions https://blog.blocknative.com/blog/mempool-forensics
[1] Blockchain fees are broken. Here are 3 proposals to fix them. https://haseebq.com/blockchain-fees-are-broken/
[2] Ethereum's Growing Gas Crisis (And What's Being Done to Stop It) https://www.coindesk.com/ethereums-growing-gas-crisis-and-whats-being-done-to-stop-it
[3] Ethereum scalability issues exposed as high gas fees stall DeFi boom https://cointelegraph.com/news/ethereum-scalability-issues-exposed-as-high-gas-fees-stall-defi-boom
[4] A transaction pricing mechanism that includes fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion. https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md
[5] First and second-price auctions and improved transaction-fee markets https://ethresear.ch/t/first-and-second-price-auctions-and-improved-transaction-fee-markets/2410