No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee Mechanism Design
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| Main Authors: | , , |
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| Format: | Preprint |
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2024
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| _version_ | 1866916117587427328 |
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| author | Damle, Sankarshan Srivastava, Varul Gujar, Sujit |
| author_facet | Damle, Sankarshan Srivastava, Varul Gujar, Sujit |
| contents | The recently proposed Transaction Fee Mechanism (TFM) literature studies the strategic interaction between the miner of a block and the transaction creators (or users) in a blockchain. In a TFM, the miner includes transactions that maximize its utility while users submit fees for a slot in the block. The existing TFM literature focuses on satisfying standard incentive properties -- which may limit widespread adoption. We argue that a TFM is "fair" to the transaction creators if it satisfies specific notions, namely Zero-fee Transaction Inclusion and Monotonicity. First, we prove that one generally cannot ensure both these properties and prevent a miner's strategic manipulation. We also show that existing TFMs either do not satisfy these notions or do so at a high cost to the miners' utility. As such, we introduce a novel TFM using on-chain randomness -- rTFM. We prove that rTFM guarantees incentive compatibility for miners and users while satisfying our novel fairness constraints. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2402_04634 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee Mechanism Design Damle, Sankarshan Srivastava, Varul Gujar, Sujit Computer Science and Game Theory The recently proposed Transaction Fee Mechanism (TFM) literature studies the strategic interaction between the miner of a block and the transaction creators (or users) in a blockchain. In a TFM, the miner includes transactions that maximize its utility while users submit fees for a slot in the block. The existing TFM literature focuses on satisfying standard incentive properties -- which may limit widespread adoption. We argue that a TFM is "fair" to the transaction creators if it satisfies specific notions, namely Zero-fee Transaction Inclusion and Monotonicity. First, we prove that one generally cannot ensure both these properties and prevent a miner's strategic manipulation. We also show that existing TFMs either do not satisfy these notions or do so at a high cost to the miners' utility. As such, we introduce a novel TFM using on-chain randomness -- rTFM. We prove that rTFM guarantees incentive compatibility for miners and users while satisfying our novel fairness constraints. |
| title | No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee Mechanism Design |
| topic | Computer Science and Game Theory |
| url | https://arxiv.org/abs/2402.04634 |