Ephemeral Anchors and MEVil

Ephemeral Anchors and MEVil

Original Postby instagibbs

Posted on: January 24, 2024 12:19 UTC

The discussion involves a technical analysis of transaction fee rates in the context of Bitcoin transactions and their potential implications.

The focal point is the comparison between two combined transactions (TxA+TxB) with a fee rate of 2.2, versus a single transaction (TxA) that includes a burn of the ephemeral anchor—a concept used in the Lightning Network—increasing the fee rate to approximately 2.74. This increment in fee rate is calculated using a formula where 1000 units are divided by the sum of the size of the original transaction plus the size of the burn, here represented as 300+65 bytes, respectively.

There's an uncertainty expressed regarding whether this approach accounts for the possible interactions with other transactions that are currently pending in the memory pool ('mempool'), which could introduce additional complexities from an incentives perspective. Specifically, there's concern about whether existing mempool transactions might undermine the effectiveness of the "diagram check" being proposed. This leads to the suggestion that if miners can incorporate the ephemeral anchor as an additional input to an existing transaction, the proposed byte count for the burn should be adjusted from 65 bytes to 41 bytes.

Moreover, there's an argument made against restricting burns that peers could execute autonomously. It’s implied that such restrictions may not align with the intended goals since they would not impact miners, given that miners are not influenced by these checks when constructing blocks. This touches on the broader theme of how protocol rules interact with miner incentives and behaviors.

In essence, the conversation delves into the technical nuances of optimizing transaction fees within the Bitcoin network while considering the strategic behaviors of different actors, like miners and peers, in response to protocol-enforced checks.