Empirical Analysis of EIP-1559: Transaction Fees, Waiting Time, and Consensus Security

Liu, Yulin; Lu, Yuxuan; Nayak, Kartik; Zhang, Fan; Zhang, Luyao; Zhao, Yinhong

doi:10.48550/arxiv.2201.05574

Cited by 5 publications

(9 citation statements)

References 27 publications

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“…In Liu et al (2022), the authors provide an empirical study to examine the effect of EIP1559 on the transaction fee dynamics, transactions waiting time, and security of the blockchain. The results show an improvement on the user experience by making fee estimation easier, mitigating intra-block difference of gas price paid, and reducing users' waiting times.…”

Section: Related Literaturementioning

confidence: 99%

Farsighted Miners under Transaction Fee Mechanism EIP1559

Hougaard

Pourpouneh

2023

2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)

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We investigate the recent fee mechanism EIP1559 of the Ethereum network. Whereas previous studies have focused on myopic miners, we here focus on strategic miners in the sense of miners being able to reason k-blocks ahead. We derive expressions for optimal miner behavior (in terms of setting block sizes) in the case of 2-block foresight and varying degrees of hashing power. Results indicate that a sufficiently large mining pool will have enough hashing power to gain by strategic foresight. We further use a simulation study to examine the impact of both 2-block and 3-block foresight. In particular, the simulation study indicates that for realistic levels of hashing power, mining pools do not gain from the being able to reason more than 2 blocks ahead. Moreover, even though the presence of strategic miners increase the variation in block sizes and potentially empty blocks, overall system throughput tend to increase slightly compared to myopic mining.

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Section: Related Literaturementioning

confidence: 99%

Farsighted Miners under Transaction Fee Mechanism EIP1559

Hougaard

Pourpouneh

2023

2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)

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“…Measurement and analysis of Ethereum EIP-1559. Moreover, works [50], [54], [64] conduct an empirical study on the effects of the EIP-1559 protocol. Liu et al [54] lead an empirical study the effects of EIP-1559 protocol on transaction fee dynamics, transaction waiting time, and security exploits.…”

Section: B Measurement Of Blockchainsmentioning

confidence: 99%

“…Moreover, works [50], [54], [64] conduct an empirical study on the effects of the EIP-1559 protocol. Liu et al [54] lead an empirical study the effects of EIP-1559 protocol on transaction fee dynamics, transaction waiting time, and security exploits. Stefanos et al [50] study both theoretical and experimental analysis of the dynamics and stability properties of the EIP-1559 protocol.…”

Section: B Measurement Of Blockchainsmentioning

confidence: 99%

An Empirical Study on Ethereum Private Transactions and the Security Implications

Lyu¹,

Zhang²,

Zhang³

et al. 2022

Preprint

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Recently, Decentralized Finance (DeFi) platforms on Ethereum are booming, and numerous traders are trying to capitalize on the opportunity for maximizing their benefits by launching front-running attacks and extracting Miner Extractable Values (MEVs) based on information in the public mempool. To protect end users from being harmed and hide transactions from the mempool, private transactions, a special type of transactions that are sent directly to miners, were invented. Private transactions have a high probability of being packed to the front positions of a block and being added to the blockchain by the target miner, without going through the public mempool, thus reducing the risk of being attacked by malicious entities.Despite the good intention of inventing private transactions, due to their stealthy nature, private transactions have also been used by attackers to launch attacks, which has a negative impact on the Ethereum ecosystem. However, existing works only touch upon private transactions as by-products when studying MEV, while a systematic study on private transactions is still missing. To fill this gap and paint a complete picture of private transactions, we take the first step towards investigating the private transactions on Ethereum. In particular, we collect largescale private transaction datasets and perform analysis on their characteristics, transaction costs and miner profits, as well as security impacts. This work provides deep insights on different aspects of private transactions.

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“…Nearly half a century after these seminal analyses of competitive economies, research on the stability of competitive equilibrium is once again coming to the fore, this time in computer science, perhaps motivated by applications of algorithms such as tâtonnement to load balancing over networks [Jain et al 2013], or to pricing of transactions on crypotocurrency blockchains [Leonardos et al 2021;Liu et al 2022;Reijsbergen et al 2021]. A detailed inquiry into the computational properties of market equilibria was initiated by Devanur et al [2008], who studied a special case of the Arrow-Debreu competitive economy known as the Fisher market [Brainard et al 2000].…”

Section: Introductionmentioning

confidence: 99%

“…Unfortunately, soon after this positive result appeared, Papadimitriou and Yannakakis [2010] showed that it is impossible for a price-adjustment process based on the excess demand function to converge in polynomial time to a competitive equilibrium in general, ruling out the possibility of Smale's process (and many others) justifying the notion of competitive equilibrium in all competitive economies. Nevertheless, further study of the convergence of price-adjustment processes such as tâtonnement under stronger assumptions, or in simpler models than full-blown Arrow-Debreu competitive economies, remains worthwhile, as these processes are being deployed in practice [Jain et al 2013;Leonardos et al 2021;Liu et al 2022;Reijsbergen et al 2021].…”

Section: Introductionmentioning

confidence: 99%

Tâtonnement in Homothetic Fisher Markets

Denizalp

Zhao

Greenwald

2023

Proceedings of the 24th ACM Conference on Economics and Computation

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A prevalent theme in the economics and computation literature is to identify natural price-adjustment processes by which sellers and buyers in a market can discover equilibrium prices. An example of such a process is tâtonnement, an auction-like algorithm first proposed in 1874 by French economist Walras in which sellers adjust prices based on the Marshallian demands of buyers, i.e., budget-constrained utility-maximizing demands. A dual concept in consumer theory is a buyer's Hicksian demand, i.e., consumptions that minimize expenditure while achieving a desired utility level. In this paper, we identify the maximum of the absolute value of the elasticity of the Hicksian demand, i.e., the maximum percentage change in the Hicksian demand of any good w.r.t. the change in the price of some other good, as an economic parameter sufficient to capture and explain a range of convergent and non-convergent tâtonnement behaviors in a broad class of markets. In particular, we prove the convergence of tâtonnement at a rate of ( (1+ 2 ) / ), in homothetic Fisher markets with bounded price elasticity of Hicksian demand, i.e., Fisher markets in which consumers have preferences represented by homogeneous utility functions and the price elasticity of their Hicksian demand is bounded, where is the maximum absolute value of the price elasticity of Hicksian demand across all buyers. Our result not only generalizes known convergence results for CES Fisher markets, but extends them to mixed nested CES markets and Fisher markets with continuous, possibly non-concave, homogeneous utility functions. Our convergence rate covers the full spectrum of nested CES utilities, including Leontief and linear utilities, unifying previously existing disparate convergence and non-convergence results. In particular, for = 0, i.e., Leontief markets, we recover the best-known convergence rate of ( 1 / ), and as → ∞, e.g., linear Fisher markets, we obtain non-convergent behavior, as expected.CCS Concepts: • Theory of computation → Exact and approximate computation of market equilibria.

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Empirical Analysis of EIP-1559: Transaction Fees, Waiting Time, and Consensus Security

Cited by 5 publications

References 27 publications

Farsighted Miners under Transaction Fee Mechanism EIP1559

Farsighted Miners under Transaction Fee Mechanism EIP1559

An Empirical Study on Ethereum Private Transactions and the Security Implications

Tâtonnement in Homothetic Fisher Markets

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