A brief analysis of the Filecoin transfer fee mechanism: Why use the EIP-1559 fee standard?

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Whether EIP-1559 can solve the problem of network congestion remains to be tested.

Original title: “Why does Filecoin use Ethereum’s EIP1559 miner fee mechanism?”
Written by: Daisy

Filecoin has successfully launched the mainnet on October 15, 2020, and imToken has also simultaneously supported FIL (Filecoin’s mainnet currency) transfer. However, shortly after the mainnet went live, news of the Filecoin miners’ strike appeared in various news media. Will the transfer function of FIL be affected?

Data source: Filscout.io

On the day of the Filecoin mainnet launch, the effective computing power of the entire network was 566.9 PiB. At the time of writing, this data is 604.18 PiB, so the computing power is still increasing. Don’t worry about our transfer information not being processed and packaged by miners, but some miners are dissatisfied. Some economic incentive mechanisms have led to slower growth in computing power.

Unlike blockchains such as Bitcoin and Ethereum, which give all miners’ fees to miners, Filecoin miners can only get part of the miners’ fees as a reward for maintaining network stability and processing packaged transactions.

Whose pocket is the miner fee paid by our transfer? Today’s article will share with you about Filecoin’s transfer mechanism.

Required resources for FIL transfer: GAS

As we all know, the word Gas was originally proposed on Ethereum to measure the resources consumed by transactions on the chain. In “How to avoid the sky-high miner fee transfer on Ethereum”, we have introduced the charging mechanism of Ethereum transfer:

Miner fee = Gas Price * Gas ​​Used

Gas is often translated as “gasoline.” The miner’s fee for a transaction is equal to the product of gasoline price and gasoline consumption. When the network is congested, the same transaction, although the amount of gasoline consumed remains the same, the price of gasoline will rise. Therefore, Gas Price has always been an important indicator of the ecological activity and transaction congestion on the Ethereum network.

A brief analysis of the Filecoin transfer fee mechanism: Why use the EIP-1559 fee standard?Data source: Gas Now

The DeFi craze has gradually receded in the past two weeks. At present, an ordinary transfer uses the “extreme speed” mode, and the required Gas Price is 44 Gwei (this data changes in real time). Before almost everyone was involved in liquid mining, The Gas Price rose to 1000 Gwei.

The gasoline consumption of ordinary transfer is about 21,000. When the Gas Price is 44 Gwei, the miner’s fee for this transfer is 44 Gwei * 21,000 = 924,000 Gwei = 0.000924 ETH. When the Gas Price rises to 1000 Gwei, the transfer is The miner fee to be paid is 1000 Gwei * 21,000 = 0.021 ETH.

For the same transfer, when the miner fee you paid rose from 0.000924 ETH to 0.021 ETH, the finger that clicked to confirm the payment might hover over the button for a while, and I couldn’t help thinking about how things got to this point? ? ?

A brief analysis of the Filecoin transfer fee mechanism: Why use the EIP-1559 fee standard?

The current transfer mechanism of Ethereum is based on the higher price. Users will pay higher miner fees in order to make their transactions confirmed and packaged by miners as soon as possible. This also explains why miners’ fees have become increasingly expensive some time ago .

In order to improve the current bidding auction-style miner fee collection method, Ethereum co-founder V God, Eric Conner, Rick Dudley and others proposed an Ethereum miner fee improvement plan in 2019, which is EIP-1559.

Isn’t this article about Filecoin’s fee mechanism? Why has it been explaining the principle of Ethereum’s miner fee? Because EIP-1559 is the charging mechanism that Filecoin follows.

What is EIP-1559?

EIP-1559 adopts the form of “basic fee + tip”, estimated miner fee = (Gas Premium + Base Fee) * Gas ​​Limit

In order to better understand Filecoin’s miner fee computer system, we need to introduce 4 terms

  • Gas Used: The actual gas value consumed by each transaction.
  • Gas Limit: It is the estimated limit value of gas consumption for a transaction, which means the upper limit value that the transaction can consume.
  • Base Fee: The base fee. This value is determined by the transaction congestion on the chain. It will fluctuate according to the actual network conditions and cannot be adjusted manually by the user. The higher the Base Fee, the higher the block utilization, that is, the more transaction data contained in a single block.
  • Gas Premium: Tip. In the case of network congestion, you can pay the tip to make the transaction packaged as soon as possible. In addition, in order to avoid the occurrence of “expensive miner fees]”, it is necessary to set upper limit protection on miner fees.

After understanding the above 4 nouns, let’s take a look at the formula for calculating miner fees:

A brief analysis of the Filecoin transfer fee mechanism: Why use the EIP-1559 fee standard?

It is estimated that not all the miner fees will enter the miners’ pockets. Base Fee * Gas ​​Used is the product of the base fee and the actual gasoline consumption, which is the amount of FIL “burned”. This part of FIL will be sent to a black hole address that can only enter but not exit, and exit the market.

The money miners can get is Gas Premium * Gas ​​Used, which is the product of tip and gasoline consumption.

(Gas Premium+Base Fee) * (Gas Limit-Gas Used), this part of the FIL will also be “burned” as a penalty for overestimating the Gas Limit, and the remaining FIL will be returned to the user’s address.

A brief analysis of the Filecoin transfer fee mechanism: Why use the EIP-1559 fee standard?Data source: Filscout.io

This is a piece of general transfer details from the blockchain browser Filscout.io. You can compare the data in the figure with the terms related to gas fees introduced above.

At last

EIP-1559 has moved the miners’ cheese to a certain extent. When the network is not congested, the zero profit has discouraged the miners’ enthusiasm for packaged transactions. In addition, many people believe that EIP-1559 cannot fundamentally solve the problem of network congestion. When the transaction volume is severely congested, the higher bidder still gets the money, returning to the previous bidding auction-style fee collection method.

Therefore, it remains to be tested by the market whether the miner fee amendment proposed by V God can really work.

Reference documents:

[1]EIP1559:
https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md

[2]Filecoin Features:
https://filecoin.io/blog/filecoin-features-gas-fees/

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