Fee Structure
Since every transaction posted to the blockchain adds to the cost of downloading and validating the transaction on the network, some kind of regulatory mechanism (often involving transaction fees) is needed to prevent abuse. The default approach used in Bitcoin is to charge purely voluntary fees, relying on miners to act as gatekeepers and set dynamic minimum fees. This approach has been well received in the Bitcoin community, especially in becau. Because it is "market-based," it allows supply and demand between miners and transaction senders to determine the price. The problem with this way of reasoning, however, is that transaction processing is not a marketplace. While it is intuitively appealing to understand the services that miners provide to senders as transaction processing, in practice every transaction a miner includes needs to be processed by every node in the network, so the vast majority of the cost of the transaction is processed The work is decided by a third party, not by the miners who decide whether to include it or not. As a result, the usual tragic problems are highly likely.
However, it turns out that in the presence of this flaw in a market-based mechanism, given certain inaccurate simplifying assumptions, it magically cancels itself out. The parameters are as follows, assuming:
- A transaction results in k actions that provide a reward kR to any miner that includes that reward, where R is set by the sender and kandRare(roughly) visible to the minerin advance.
- An operation has a processing cost of C for any node (ie, all nodes are equally e cient)
- There are N mining nodes, each with exactly equal processing power (i.e. 1/N of the total)
- There are no non-mining full nodes.
If the expected return is greater than the cost, then miners will be willing to trade. Therefore, since the miner has a 1/N chance to process the next block, the expected reward is kR/N, while the miner's processing cost is only kC. Therefore, miners will include transactions where kR/N > kC or R > NC. Note that R is the per-operation fee o ered by the sender, and therefore a lower bound on what the sender can earn from the transaction, while NC is the cost of the entire network processing the operation together. Therefore, miners have an incentive to include only those transactions whose total utility exceeds cost.
However, there are actually several important deviations from these assumptions:
On a technical level the gain is inherent in the optimized DEX transactions. This means 100% of the combo gain first goes to the trader's account. The CIPC part of the combo gain is then subtracted as a separate transaction along with any micro trading fees (which may be zero).
Depending on the tier level the combo gain split and the micro trading fees vary. For example the X Level tier has a 80% combo gain and no micro fees (other than the raw Algorand transaction fees). This means that the user retains 80% of the generated combo gain and the remaining 20% are paid to the project (in CIPC or in ALGO).
1. Miners do pay higher transaction fees than other validators because the extra validation time delays block propagation, increasing the chance of blocks becoming stale.
2. There do exist non-mining full nodes.
3. In practice, the distribution of mining rights may end up beingfundamentally unequal.
4. Speculators, political enemies, and madmen do exist, and their utility functions include causing damage to the network, and they can subtly build contracts at a much lower cost than what other validating nodes would pay.
(1)makes miners tend to reduce transactions(2)increases NC; thus, these two e ects at least partially cancel each other out. To solve these problems, we simply set a floating cap, no block can do more than BLK_LIMIT_FACTOR times the long-term exponential moving average. Specifically:
blk.oplimit = floor((blk.parent.oplimit \* (EMAFACTOR - 1) + floor(parent.opcount \* BLK\_LIMIT\_FACTOR)) / EMA\_FACTOR)
BLK_LIMIT_FACTOR and EMA_FACTOR are constants and will be set to
65536and1.5fornow,butmaychangeafterfurtheranalysis.
There is another factor that does not incentivize large blocks in Bitcoin: large blocks will take longer to propagate and thus have a higher probability of becoming old. In the Cosmic Interstellar Public Chain, the propagation of gas- intensive blocks may also take longer, both because they are physically larger, and because they take longer to process transaction state transitions for verification. This latency inhibitor is an important consideration in Bitcoin, but less so in the Cosmic Interstellar Public Chain due to the GHOST protocol. Therefore, relying on regulated block limits provides a more stable baseline.