EIP-1559: Fee market change for ETH 1.0 chain

[mtefagh]

@mdalembert

the base fee drop across a single cycle of the base fee oscillation is substantially smaller than the amplitude of such oscillation (assuming that the adversary controls a relatively small share of transactions)

You are right but let me remind you that this is only because of 1) the coefficient 1/8 and 2) the hard cap of block size equal to two times the gas target. I have seen discussions about removing this block size limit or changing this coefficient. We should be very careful about these subjects in the future, as they both have the potential to make this attack driving the base fee to zero in a matter of minutes!

@mdalembert

a strategic user would have a perverse incentive to delay transactions and send them as batches of double-full blocks in order to both profit off the periodic gas price drops due to the base fee oscillation and amplify any preexisting oscillation, even if they have no interest in depressing the base fee in a long-term attack as you were describing in your post.

Absolutely right! This is actually the original version of this attack which I explained two years ago in this very same thread! Note that, even if you don’t want to tolerate this one single block delay, you can still simulate the same behavior by any kind of gas token.

@mdalembert

1/ The oscillation would increase the chances of users overpaying above the “fair” market-clearing price, giving them a perverse incentive to bid below their marginal utility (which would reinforce any preexisting oscillation). 2/ Because it would potentially create periodic times of congestion where the pricing mechanism reverts to a first-price auction. 3/ Because of the rather unpredictable state growth I was complaining about earlier in this thread.

Yes, like any other pump-and-dump scheme, you either join it or lose money otherwise. I agree with all your points that a long-time equilibrium seems to be every other block will be full with a very low base fee and first-price auctions determining the transactions, and the other blocks will have higher gas prices only for the urgent transactions which can’t wait to join the next cycle of oscillation.

@mdalembert

I agree that making the base fee update formula path-independent as in EIP-3416 is a move in the right direction: It would certainly fix the state growth unpredictability and the long-term base fee drop you were describing. However it wouldn’t remove the incentive for users to cause such oscillations, because, if my understanding is correct, in EIP-3416 the base fee paid by the transactions of a block is only dependent on the gas usage of the previous blocks (just as is the case for this proposal), so the submitter of a double-full block doesn’t pay any penalty whatsoever (only the subsequent blocks get to pay the price…), and this short-term attack would still be profitable with either proposal.

Again, I have mentioned this very point two years ago in here (last paragraph)! I have also explained it more recently in here and here. However, I didn’t mention this in EIP-3416 trying to not deviate too much from the original EIP-1559 making it too difficult to review for other people.