Filecoin's EIP-1559 practical challenge: Transaction fees fluctuate drastically, how should miners respond?

When BaseFee rises sharply, Filecoin miners may not be able to afford the transaction fees.

Original title: "Let's talk about Filecoin's gas fee again"
Written by: Hu Feitong

In the article "Let's talk about Filecoin's transfer fees", I have put forward some opinions on Filecoin's adoption of EIP1559, some of which are not mature. However, EIP1559 itself is the first time it has been adopted in the blockchain industry, and more discussions should be beneficial to the development of the entire ecosystem.

One of the great powers of EIP1559 is the exponential adjustment of BaseFee. We saw its power in the latter stage of SpaceRace, but we didn’t expect that it would be seen again less than a month after the mainnet was launched. Miners had to take measures to temporarily suspend sending messages and increasing computing power, but as soon as the situation slowed down, everyone was eager to get busy again. Just yesterday, its power was seen again.

Just take a look at what it feels like to see BaseFee drop 10,000 times in just one day, then go sideways for a while, and then rise 10,000 times again. In the two hours between 21:30 and 23:30, it rose 100 times. It was a complete U-shaped reversal. It caught people off guard.

This chart may not give you an intuitive feeling, but a simple check of the on-chain data will make it clearer how much it will cost miners to increase and maintain computing power when the gas fee exceeds 1.0 nanoFil.

Let me give you a sense of what it feels like for a large miner to burn thousands of FIL every day ?

Take November 16, 2020 at 23:20 as an example. At this time: BaseFee is as high as 1.299 nanoFil .

• ProveCommitSector message payment fee 0.06Fil left

• The handling fee for the PreCommitSector message is about 0.029. The total handling fee for the two is as high as 0.09 Fil

• The transaction fee of SubmitWindowedPoSt is about 0.8~0.9 FIL/Partition.

Just do some simple arithmetic.

If the computing power increases by 1.0PiB, approximately 1024*32 = 32768 PreCommitSector and ProveCommitSector messages need to be sent.

The handling fee you need to pay is approximately:

32768 * 0.09 = 2950 Fil

If we want to maintain 50 PiB of computing power, the number of partitions that need to be proven in one day is

50 * 1024 * 32 / 2349 ~ = 698

That means you need to pay approximately:

698 * 0.8 ~= 558 Fil

Adding the two together, a miner with 50PiB computing power needs to consume more than 3500 Fil to increase his computing power by 1PiB per day.

In addition, due to synchronization and network problems caused by network congestion, the block generation rate has decreased and the orphan block rate has increased. The rewards of the entire network have been reduced. The theoretical income of a single T is decreasing, and the actual income is even lower.

That is to say, no matter which miner, when the network is congested and the Gas BaseFee rises, the profit will be greatly reduced. In addition, 75% of the current block rewards have to be released linearly every 180 days. In other words, the actual available profit that can be obtained is relatively small. This consumption basically makes everyone continue to invest in it instead of getting cash returns.

Dear investors, please calculate how much distributable income you can get every day when gas is relatively low? Subtract this number, how much income can you still get? It is possible that it will be a negative number.

So a very important question is, what should we do? There are two ways:

1. Miners should make adjustments themselves, suspend sending messages and stop increasing computing power when Gas is high;

2. Improve the algorithm and reduce Gas usage. There are some ideas in this regard, such as:

1. Allows batch submission of PreCommitSector messages, reducing Gas consumption by merging messages;

2. Increase Sector Size (mining equipment may be affected)

3. Increase the Gas Limit and the upper limit of calculation (requires everyone to have better equipment and network)

Before the algorithm is changed and upgraded, miners have to make adjustments themselves. But this is market regulation after all, so shocks and swings are inevitable. Let's also look forward to further innovations in Filecoin technology to achieve higher TPS. There is progress only when there are challenges.

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