Transaction Fee Mechanism Design for the Ethereum Blockchain: An Economic Analysis of EIP-1559

12/01/2020

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by   Tim Roughgarden, et al.

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EIP-1559 is a proposal to make several tightly coupled additions to Ethereum's transaction fee mechanism, including variable-size blocks and a burned base fee that rises and falls with demand. This report assesses the game-theoretic strengths and weaknesses of the proposal and explores some alternative designs.