Ephemeral Anchors and MEVil

Ephemeral Anchors and MEVil

Original Postby instagibbs

Posted on: January 24, 2024 22:44 UTC

Understanding the dynamics of transaction fees in a multi-party payment channel can be complex, particularly when considering the potential impact of third-party actions on fee structures.

One point of concern is the possibility that a counterparty may manipulate the ephemeral anchor value to either directly profit or facilitate another transaction, which goes beyond the intended purpose of simply burning the value. This manipulation could lead to a situation where other parties are forced to pay higher fees than necessary.

When a transaction package remains unconfirmed in the memory pool (mempool), there is a risk that the other channel parties might have to utilize Replace-by-Fee (RBF) to expedite the confirmation process, thus increasing the cost due to the higher block feerate required for quicker inclusion in the blockchain. Such a scenario arises because the initial transaction, with its attached fees and use of the ephemeral anchor, passes the pure burn diagram check but does not get confirmed swiftly.

The discussion touches upon concerns related to bip125 rule3, which the proposed v3 seeks to address. The underlying issue seems to be finding an equilibrium where the feerate is adjusted adequately—neither too low to delay confirmation nor too high to incur unnecessary costs—thereby making it more "incentive compatible" for miners to include the transaction in a block. However, without a specific example illustrating the problem, the theoretical concerns remain somewhat abstract, indicating a need for practical scenarios to evaluate the efficacy of proposed solutions fully.