Epicenter brings you in-depth conversations about the technical, economic and social implications of cryptocurrencies and blockchain technologies. Every week, we interview business leaders, engineers academics and entrepreneurs, and bring you a diverse spectrum of opinions and points of view. Epicenter is hosted by Sebastien Couture, Brian Fabian Crain, Friederike Ernst, Meher Roy and Felix Lutsch. Since 2014, our episodes have been downloaded over 8 million times.
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episode 390: Tim Roughgarden: EIP-1559 – Tackling the Gas Fee Problem on Ethereum
Ethereum Improvement Proposal (EIP)-1559 is a proposal to make several tightly coupled additions to Ethereum’s transaction fee mechanism. Central to the design is a base fee, which plays the role of a reserve price and is meant to match supply and demand. Every transaction included in a block must pay that block’s base fee (per unit of gas), and this payment is burnt rather than transferred to the block’s miner. The base fee is adjusted after every block, with larger-than-target blocks increasing it and smaller-than-target blocks decreasing it.
Tim Roughgarden is a Professor of Computer Science and member of the Data Science Institute at Columbia University. Tim did an extensive game theoretical review of EIP-1559 and joined us to chat about what the proposal is trying to do and why, and how it is doing it.
Topics covered in this episode:
- What Tim's research focuses on and how he became involved with blockchain
- What made him interested in the fees problem
- The current fee system on Ethereum - the first-price auction and base fee
- EIP-1559 - the problem it solves and how it does it
- Increasing and decreasing of block sizes
- The threat of miners colluding to drive down base fees
- Deep dive into how the proposal works
- What are some alternatives to EIP-1559
Episode links:
- Tim Roughgarden
- EIP-1559 on GitHub
- An Economic Analysis of EIP-1559
- Tim on Twitter
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This episode is hosted by Friederike Ernst & Sunny Aggarwal. Show notes and listening options: epicenter.tv/390