Mempool Incentive Compatibility

Mempool Incentive Compatibility

Original Postby sdaftuar

Posted on: March 24, 2024 21:47 UTC

In addressing the issue of Denial of Service (DoS) within transaction processing, a proposed solution involves the criteria for replacing transactions in the mempool.

Specifically, if a transaction has remained in the mempool for more than 12 blocks and there is an offer to replace it with a transaction at a higher fee rate that would position the replacement at the top of the mempool, and both transactions are version 3, then the Replace-By-Fee (RBF) policy could be applied while disregarding the total fee rule. However, concerns arise regarding the potential exploitation of this mechanism by adversaries. They might circumvent the intended safeguard by substituting their "pinning" transaction shortly before the expiration of the 12-block period with only a nominal increase in the fee. This tactic would effectively extend the pinning duration for another 12 blocks, raising questions about the effectiveness of the proposed solution in preventing manipulation and whether additional implementation details need to be considered to mitigate such vulnerabilities.