Dynamics of the EIP-1559 Fee Market

ETHconomics at Devconnect Amsterdam 2022 · 21 Apr 2022 · 27:35

Stefanos Leonardos analyzes the EIP-1559 transaction fee market using tools from game theory and dynamical systems, deriving bounds on the base-fee update step size needed for convergence to equilibrium. Larger step sizes, the talk shows, can produce instability and even chaotic behavior. Drawing on on-chain data since EIP-1559's launch, Leonardos evaluates its impact on user experience and proposes an alternative base-fee adjustment rule to address oscillations during demand bursts such as NFT drops.

Speakers

• Stefanos Leonardos

Topics

• Protocol

From ETHconomics at Devconnect Amsterdam 2022, hosted by Robust Incentives Group.