Optimal Dynamic Fees for Blockchain Resources
Davide Crapis Ciamac C. Moallemi Shouqiao Wang
We develop a general and practical framework to address the problem of the
optimal design of dynamic fee mechanisms for multiple blockchain resources. Our
framework allows to compute policies that optimally trade-off between adjusting
resource prices to handle persistent demand shifts versus being robust to local
noise in the observed block demand. In the general case with more than one
resource, our optimal policies correctly handle cross-effects (complementarity
and substitutability) in resource demands. We also show how these cross-effects
can be used to inform resource design, i.e. combining resources into bundles
that have low demand-side cross-effects can yield simpler and more efficient
price-update rules. Our framework is also practical, we demonstrate how it can
be used to refine or inform the design of heuristic fee update rules such as
EIP-1559 or EIP-4844 with two case studies. We then estimate a uni-dimensional
version of our model using real market data from the Ethereum blockchain and
empirically compare the performance of our optimal policies to EIP-1559.