delvingbitcoin

Liquidity griefing in multi-party transaction protocols

Liquidity griefing in multi-party transaction protocols

Original Postby t-bast

Posted on: December 8, 2023 08:11 UTC

The discussion centers around a nuanced aspect of transaction processing where an inflated transaction results in a lower-than-expected fee rate.

This situation presents an opportunity for the transaction to be replaced by another that offers a fee rate aligned with expectations. However, this process is complicated when descendant transactions are involved. Pinning with descendants leads to even lower fee rates for those subsequent transactions, increasing the likelihood that they will be removed from some nodes' mempools. The replacement transaction can then propagate more easily.

Quantifying the exact impact of this issue is challenging due to the variable nature of mempool topologies across the network. Different nodes may have distinct policies and capacities, affecting how transactions are managed and retained. The inability to predict these outcomes stems from the complex interplay between the various mempools and the transactions they contain.