Bell Curve
Fee Markets: How Blockchains Price Scarce Resources | Pranav Garimidi & Sam Hart
Dec 27, 2023
Blockchain fee market expert, Pranav Garimidi, and blockchain fee market analyst, Sam Hart, join Mike to discuss the challenges of balancing spam prevention with positive user experience. They dive into fee structures in major chains like Solana, unpack the "fee market fallacy," explore fee burning debates, and analyze the use of credits to shape user behaviors. They also discuss the origins of fee markets in Bitcoin, innovations in Ethereum's EIP-1559, and the future of pricing scarce resources in blockchains.
01:26:20
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Quick takeaways
- Solana's fee market operates differently from Ethereum, with transactions needing to declare access lists upfront and relying on validators to make optimal block packing choices for price inference.
- Solana's fee market faces challenges such as the lack of a dynamic base fee and the need for more explicit pricing options and optimized block building for fair fee allocation.
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Overview of Solana's fee market
Solana's fee market operates differently from Ethereum. Transactions in Solana have to declare access lists upfront, and only interactions with the listed accounts are considered valid. Solana uses a fixed base fee per signature verification and an optional priority fee per computation unit (CU). The fee mechanism is simple, but due to Solana's parallel execution environment, account contention and limiting resource usage, the fee market is more complex. The current implementation relies on validators making optimal block packing choices to infer prices, creating local fee markets. The community is discussing improvements to make the fee mechanism more explicit with different pricing options for specific accounts.
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