Package aware Fee estimator post cluster mempool

Package aware Fee estimator post cluster mempool

Original Postby glozow

Posted on: December 21, 2023 11:11 UTC

Understanding fee estimation in the context of package transactions involves recognizing that the fee estimator is similar to an auction system where each transaction or set of transactions places a "bid" to be included in a block based on their offered fee rate.

The process of confirming transactions within blocks can be viewed as determining which bids were successful over a period defined by block height.

Child Pays for Parent (CPFP) transactions are special bids that can override the initial fee rate of a transaction by associating a higher fee with a subsequent child transaction. This new bid may replace the original one, although it's possible for the original transaction to be mined independently. The complexity arises in identifying which bids have been effectively accepted into a block.

A single data point in this system could be represented by a chunk, a group of transactions that functions as a unit. An example of such a grouping is a commitment transaction associated with ephemeral anchors and its sponsor transaction, where these are tightly coupled and should be treated as a singular entity for mining purposes. CPFPs, whether individual or batched, could be seen as placing a new collective bid for the entire package at the cumulative fee rate of the chunk.

In practice, many transaction clusters might consist of a single transaction, and it is likely that chunks will be mined wholly rather than being split. Therefore, tracking chunks as units may be a practical approach. Alternatively, both chunks and individual transactions could be tracked, with an emphasis on exact matches used after the linearization of block contents.

This model simplifies the process of fee estimation by focusing on aggregated data points, which could potentially streamline the inclusion of transaction packages in blocks while accounting for the dynamic nature of fee rates and the interdependence of certain transactions.