Pricing tips in 1559

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Pricing tips in 1559

I'm looking at gas prices and thinking about how an elastic base fee would effect gas price selection.

Generally I think its fair to say the average ETH user (be they bot or man) currently looks at the last 10-30 blocks and speculates on the required gas fee based on what is required for selection.

Now let's think about gas fee selection during a spike. (Let's say gas is 100 gui +tip.) The base fee will increase as the block becomes full and as people add "tips " on top of each other. (Let's say gas peaks at 150 and stays there until the base fee catches up. Ie base fee =151).

As the base fee catches up to the most users are willing to tip, users stop using ETH. Eventually the number of users willing to pay the base fee (150) decreases and blocks are no longer "full".

At this junction, isn't there a step-jump in the incentive to tip miners? Tips will go from ~1-5 GUI to infinitesimaly small. As long as a user knows the block is unlikely to be full, a miner is incentivized to include any txn greater than base fee, regardless of tip.

  1. Does this make sense?
  2. Are blocks likely to be increasing ~50% of the time and decreasing 50% of the time
  3. Is there an issue that miners flip between heavy incentives and low incentives? Could this create strange incentives to MEV?
  4. Who studies and thinks about these types of problems. It seems reddit is an OK place. VB blogs. Some stuff on Twitter. Feels like a bazaar.

submitted by /u/Bluemandegen
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