Mempool Incentive Compatibility

Mempool Incentive Compatibility

Original Postby rustyrussell

Posted on: February 27, 2024 06:32 UTC

The discussion revolves around a specific mechanism within a transactional system, where fees play a crucial role in determining the fate of transactions.

When certain conditions are met, such as an eviction from the mempool, the system attempts to compensate for this event by adjusting the minimum fee required for future transactions. This adjustment is an incremental increase intended to manage the transaction load more effectively. The mechanism is designed to be both limited and temporary, mirroring the approach taken for free relay transactions that remain unconfirmed in the mempool for an extended period (e.g., two weeks) before timing out.

There is a notable misconception addressed regarding the permanence of the fee increase. Some might assume that once dropped from the mempool, a transaction's history or its associated fee requirements are reset, implying no lasting consequences. However, this understanding is corrected with the clarification that the minimum fee does indeed experience an increase, which persists for a certain duration. This aspect underscores a fundamental strategy to ensure the mempool remains manageable by indirectly influencing the cost of entry for subsequent transactions following specific events such as evictions.

In essence, the system operates under a principle where it seeks to balance accessibility and efficiency through financial incentives. By adjusting fees in response to transactional behaviors and mempool conditions, it aims to maintain a smooth operation despite fluctuations in demand or available space. This dynamic fee structure reflects a broader attempt to optimize network resources in a way that is fair yet responsive to the immediate context.