No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee Mechanism Design
<|reference_start|>No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee Mechanism Design: The recently proposed Transaction Fee Mechanism (TFM) literature studies the strategic interaction between the miner of a block and the transaction creators (or users) in a blockchain. In a TFM, the miner includes transactions that maximize its utility while users submit fees for a slot in the block. The existing TFM literature focuses on satisfying standard incentive properties -- which may limit widespread adoption. We argue that a TFM is "fair" to the transaction creators if it satisfies specific notions, namely Zero-fee Transaction Inclusion and Monotonicity. First, we prove that one generally cannot ensure both these properties and prevent a miner's strategic manipulation. We also show that existing TFMs either do not satisfy these notions or do so at a high cost to the miners' utility. As such, we introduce a novel TFM using on-chain randomness -- rTFM. We prove that rTFM guarantees incentive compatibility for miners and users while satisfying our novel fairness constraints.<|reference_end|>
@article{damle2024no,
    title={No Transaction Fees? No Problem! Achieving Fairness in Transaction Fee
  Mechanism Design},
    author={Sankarshan Damle and Varul Srivastava and Sujit Gujar},
    journal={arXiv preprint arXiv:2402.04634},
    year={2024},
    archivePrefix={arXiv},
    eprint={2402.04634},
    primaryClass={cs.GT}
}