Bandwidth fee pricing improves blockchain transaction spreading fairness
Bandwidth Fee Mechanisms for Certified Transaction Dissemination
Computer Science and Game Theory
Summary
Blockchains need to share transaction data across many computers before agreeing on the final result. The authors look at how to fairly charge for the bandwidth used when spreading this data, which is different from charging for computing power. They find it is impossible to stop some types of cheating between validators when setting fees based only on transaction information, but they do design a pricing method that works fairly for individual users and validators. They also propose a way to update bandwidth prices over time, helping keep costs stable in large networks.
What this means in practice
- •For blockchain protocol designers: Design bandwidth fee systems that fairly price transaction dissemination costs and deter some types of cheating between validators.
- •For decentralized network engineers: Set dynamic bandwidth prices using a stable update rule to maintain cost stability in large peer-to-peer blockchain networks.
A theory result. No direct application yet.
Authors
Eleftheria Fassman, Mahimna Kelkar, Benjamin Marsh, Ke Wu
Abstract
We study bandwidth fee mechanisms (BFMs) for pricing threshold-certified transaction dissemination before consensus. Analogous to transaction fee mechanisms for computation, BFMs price blockchain communication, which is especially relevant when dissemination is separated from consensus and execution. We model BFMs as two-sided procurement auctions between users submitting transactions and validators receiving and forwarding them. Any validator may serve as a transaction's source and forward it to a threshold of attesters. The model accounts for receipt from the user and subsequent transfers between validators, while abstracting away unrestricted multi-hop gossip and network topology. We establish limits on myopic incentive compatibility: no nontrivial transcript-based BFM prevents profitable collusion between two validators, and no nontrivial BFM simultaneously satisfies incentive compatibility for individual users, individual validators, and coalitions of one validator and one user. On the feasibility side, we give a greedy-route posted-price mechanism that is incentive compatible for every individual user and validator. We also study bandwidth pricing across blocks. Assuming honest validator execution, we propose an EIP-1559-style price-update rule whose fluid approximation has a unique fixed point that is locally stable for sufficiently small step sizes. In large markets, prices starting near this point remain nearby with high probability over any fixed time horizon.