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Transaction Fee Mechanism Design for the Ethereum Blockchain: An Economic Analysis of EIP-1559

1 December 2020
Tim Roughgarden
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Abstract

EIP-1559 is a proposal to make several tightly coupled additions to Ethereum's transaction fee mechanism, including variable-size blocks and a burned base fee that rises and falls with demand. This report assesses the game-theoretic strengths and weaknesses of the proposal and explores some alternative designs.

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