Designing Fair Transaction Fee Mechanisms for Leaderless Blockchains ∞ Research

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Briefing

Traditional transaction fee mechanisms (TFMs) are designed for single-leader blockchains, but emerging high-throughput protocols often feature multiple, simultaneous block producers, creating a gap in TFM design for these “leaderless” architectures. This paper introduces a novel game-theoretic framework for multi-proposer TFMs and proposes the First-Price Auction with Equal Sharing (FPA-EQ) mechanism, which is proven to be “strongly Block Producer Incentive Compatible” (strongly BPIC) and near-optimal in welfare. This foundational work provides the economic underpinnings for robust and fair transaction processing in next-generation, scalable decentralized systems.

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Context

The prevailing theoretical landscape for blockchain transaction fee mechanisms (TFMs) has historically focused on leader-based protocols, where a single entity monopolistically controls block construction. This established model, exemplified by Bitcoin and early Ethereum, inherently simplified incentive design by centralizing block production decisions. However, the advent of high-throughput, Directed Acyclic Graph (DAG)-based consensus protocols, which distribute block production across multiple concurrent proposers, exposed a critical theoretical void ∞ how to design incentive-compatible and efficient TFMs in an environment without a single, dominant leader.

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Analysis

The paper’s core innovation lies in extending transaction fee mechanism design to “leaderless” blockchain protocols, where multiple block producers simultaneously contribute to block creation. It introduces an extensive-form game model to capture the complex strategic interactions among these multiple proposers. The key primitive is the “strongly Block Producer Incentive Compatible (BPIC)” property, which ensures that block producers are incentivized to follow the protocol’s intended allocation rules, forming a Nash equilibrium that is superior to other equilibria. The paper proposes the First-Price Auction with Equal Sharing (FPA-EQ) mechanism, which fundamentally alters the incentive landscape to promote honest behavior and efficient transaction inclusion in a decentralized, multi-proposer environment, differing from traditional single-leader auctions.

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Parameters

Core Concept ∞ Strongly Block Producer Incentive Compatibility (BPIC)
New System/Protocol ∞ First-Price Auction with Equal Sharing (FPA-EQ)
Key Authors ∞ Pranav Garimidi, Lioba Heimbach, Tim Roughgarden
Blockchain Architecture ∞ Leaderless Blockchain Protocols (e.g. DAG-based consensus)
Performance Metric ∞ At least 63.2% of maximum-possible expected welfare at equilibrium

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Outlook

This research opens crucial avenues for developing economically sound and robust transaction fee mechanisms for the next generation of high-throughput, leaderless blockchain architectures, such as those leveraging Directed Acyclic Graphs. In the coming 3-5 years, these theoretical foundations are poised to enable the deployment of more scalable and equitable decentralized applications by providing the incentive structures necessary for multiple validators to coordinate efficiently and fairly. Future research will likely explore the practical implementation challenges of FPA-EQ, its resilience against more sophisticated collusion strategies, and its adaptability to diverse leaderless consensus paradigms, further solidifying the economic security of decentralized systems.

This research fundamentally redefines transaction fee mechanism design for emergent leaderless blockchain architectures, establishing critical incentive compatibility for future decentralized scalability.

Signal Acquired from ∞ arXiv.org