feemarket

Abstract

This document specifies the feemarket module which allows to define a global transaction fee for the network.

This module has been designed to support EIP1559 in cosmos-sdk.

The MempoolFeeDecorator in x/auth module needs to be overwritten to check the baseFee along with the minimal-gas-prices allowing to implement a global fee mechanism which vary depending on the network activity.

For more reference to EIP-1559:

https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md

Contents

1. Concepts
2. State
3. Begin Block
4. End Block
5. Keeper
6. Events
7. Params
8. Client
9. AnteHandlers

Concepts

EIP-1559: Fee Market

EIP-1559 describes a pricing mechanism that was proposed on Ethereum to improve to calculation of transaction fees. It includes a fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with peaks of network congestion.

Before EIP-1559 the transaction fee is calculated with

fee = gasPrice * gasLimit

where gasPrice is the price per gas and gasLimit describes the amount of gas required to perform the transaction. The more complex operations a transaction requires, the higher the gas limit (see Executing EVM bytecode). To submit a transaction, the signer needs to specify the gasPrice.

With EIP-1559 enabled, the transaction fee is calculated with

fee = (baseFee + priorityTip) * gasLimit

where baseFee is the fixed-per-block network fee per gas and priorityTip is an additional fee per gas that can be set optionally. Note, that both the base fee and the priority tip are gas prices. To submit a transaction with EIP-1559, the signer needs to specify the gasFeeCap, which is the maximum fee per gas they are willing to pay in total. Optionally, the priorityTip can be specified, which covers both the priority fee and the block's network fee per gas (aka: base fee).

tip

The Cosmos SDK uses a different terminology for gas than Ethereum. What is called gasLimit on Ethereum is called gasWanted on Cosmos. You might encounter both terminologies on DEP since it builds Ethereum on top of the SDK, e.g. when using different wallets like Keplr for Cosmos and Metamask for Ethereum.

Base Fee

The base fee per gas (aka base fee) is a global gas price defined at the consensus level. It is stored as a module parameter and is adjusted at the end of each block based on the total gas used in the previous block and gas target (block gas limit / elasticity multiplier):

• it increases when blocks are above the gas target,
• it decreases when blocks are below the gas target.

Instead of burning the base fee (as implemented on Ethereum), the feemarket module allocates the base fee for regular Cosmos SDK fee distribution.

Priority Tip

In EIP-1559, the max_priority_fee_per_gas, often referred to as tip, is an additional gas price that can be added to the baseFee in order to incentivize transaction prioritization. The higher the tip, the more likely the transaction is included in the block.

Until the Cosmos SDK version v0.46, however, there is no notion of transaction prioritization. Thus, the tip for an EIP-1559 transaction on DEP should be zero (MaxPriorityFeePerGas JSON-RPC endpoint returns 0). Have a look at the mempool docs to read more about how to leverage transaction prioritization.

Effective Gas price

For EIP-1559 transactions (dynamic fee transactions) the effective gas price describes the maximum gas price that a transaction is willing to provide. It is derived from the transaction arguments and the base fee parameter. Depending on which one is smaller, the effective gas price is either the baseFee + tip or the gasFeeCap

min(baseFee + gasTipCap, gasFeeCap)

Local vs. Global Minimum Gas Prices

Minimum gas prices are used to discard spam transactions in the network, by raising the cost of transactions to the point that it is not economically viable for the spammer. This is achieved by defining a minimum gas price for accepting txs in the mempool for both Cosmos and EVM transactions. A transaction is discarded from the mempool if it doesn't provide at least one of the two types of min gas prices:

Minimum gas prices are used to discard spam transactions in the network, by raising the cost of transactions to the point that it is not economically viable for the spammer. This is achieved by defining a minimum gas price for accepting txs in the mempool for both Cosmos and EVM transactions. A transaction is discarded from the mempool if it doesn't provide at least one of the two types of min gas prices:

1. the local min gas prices that validators can set on their node config and
2. the global min gas price, which is set as a parameter in the feemarket module, which can be changed through governance.

The lower bound for a transaction gas price is determined by comparing of gas price bounds according to three cases:

1. If the effective gas price (effective gas price = base fee + priority tip) or the local minimum gas price is lower than the global MinGasPrice (min-gas-price (local) < MinGasPrice (global) OR EffectiveGasPrice < MinGasPrice), then MinGasPrice is used as a lower bound.
2. If transactions are rejected due to having a gas price lower than MinGasPrice, users need to resend the transactions with a gas price higher or equal to MinGasPrice.
3. If the effective gas price or the local minimum-gas-price is higher than the global MinGasPrice, then the larger value of the two is used as a lower bound. In the case of EIP-1559, users must increase the priority fee for their transactions to be valid.

The comparison of transaction gas price and the lower bound is implemented through AnteHandler decorators. For EVM transactions, this is done in the EthMempoolFeeDecorator and EthMinGasPriceDecorator AnteHandler and for Cosmos transactions in NewMempoolFeeDecorator and MinGasPriceDecorator AnteHandler.

tip

If the base fee decreases to a value below the global MinGasPrice, it is set to the MinGasPrice. This is implemented, so that the base fee can't drop to gas prices that wouldn't allow transactions to be accepted in the mempool, because of a higher MinGasPrice.

State

The x/feemarket module keeps in the state variable needed to the fee calculation:

Only BlockGasUsed in previous block needs to be tracked in state for the next base fee calculation.

	Description	Key	Value	Store
BlockGasUsed	gas used in the block	[]byte{1}	[]byte{gas_used}	KV

Begin block

The base fee is calculated at the beginning of each block.

Base Fee

Disabling base fee

We introduce two parameters : NoBaseFeeand EnableHeight

NoBaseFee controls the feemarket base fee value. If set to true, no calculation is done and the base fee returned by the keeper is zero.

EnableHeight controls the height we start the calculation.

• If NoBaseFee = false and height < EnableHeight, the base fee value will be equal to base_fee defined in the genesis and the BeginBlock will return without further computation.
• If NoBaseFee = false and height >= EnableHeight, the base fee is dynamically calculated upon each block at BeginBlock.

Those parameters allow us to introduce a static base fee or activate the base fee at a later stage.

Enabling base fee

To enable EIP1559 with the EVM, the following parameters should be set :

• NoBaseFee should be false
• EnableHeight should be set to a positive integer >= upgrade height. It defines at which height the chain starts the base fee adjustment
• LondonBlock evm's param should be set to a positive integer >= upgrade height. It defines at which height the chain start to accept EIP1559 transactions

Calculation

The base fee is initialized at EnableHeight to the InitialBaseFee value defined in the genesis file.

The base fee is after adjusted according to the total gas used in the previous block.

parent_gas_target = parent_gas_limit / ELASTICITY_MULTIPLIER

if EnableHeight == block.number
    base_fee = INITIAL_BASE_FEE
else if parent_gas_used == parent_gas_target:
    base_fee = parent_base_fee
else if parent_gas_used > parent_gas_target:
    gas_used_delta = parent_gas_used - parent_gas_target
    base_fee_delta = max(parent_base_fee * gas_used_delta / parent_gas_target / BASE_FEE_MAX_CHANGE_DENOMINATOR, 1)
    base_fee = parent_base_fee + base_fee_delta
else:
    gas_used_delta = parent_gas_target - parent_gas_used
    base_fee_delta = parent_base_fee * gas_used_delta / parent_gas_target / BASE_FEE_MAX_CHANGE_DENOMINATOR
    base_fee = parent_base_fee - base_fee_delta

End block

The block_gas_used value is updated at the end of each block.

Block Gas Used

The total gas used by current block is stored in the KVStore at EndBlock.

It is initialized to block_gas defined in the genesis.

Keeper

The feemarket module provides this exported keeper that can be passed to other modules, which require access to the base fee value

type Keeper interface {
    GetBaseFee(ctx sdk.Context) *big.Int
}

Events

The x/feemarket module emits the following events:

BeginBlocker

Type	Attribute Key	Attribute Value
fee_market	base_fee	{baseGasPrices}

EndBlocker

Type	Attribute Key	Attribute Value
block_gas	height	{blockHeight}
block_gas	amount	{blockGasUsed}

Parameters

The x/feemarket module contains the following parameters:

Key	Type	Default Values	Description
NoBaseFee	bool	false	control the base fee adjustment
BaseFeeChangeDenominator	uint32	8	bounds the amount the base fee that can change between blocks
ElasticityMultiplier	uint32	2	bounds the threshold which the base fee will increase or decrease depending on the total gas used in the previous block
BaseFee	uint32	1000000000	base fee for EIP-1559 blocks
EnableHeight	uint32	0	height which enable fee adjustment
MinGasPrice	sdk.Dec	0	global minimum gas price that needs to be paid to include a transaction in a block

Client

CLI

A user can query and interact with the feemarket module using the CLI.

Queries

The query commands allow users to query feemarket state.

dep query feemarket --help

Base Fee

The base-fee command allows users to query the block base fee by height.

dep query feemarket base-fee [flags]

Example:

dep query feemarket base-fee ...

Example Output:

base_fee: "512908936"

Block Gas

The block-gas command allows users to query the block gas by height.

dep query feemarket block-gas [flags]

Example:

dep query feemarket block-gas ...

Example Output:

gas: "21000"

Params

The params command allows users to query the module params.

dep query params subspace [subspace] [key] [flags]

Example:

dep query params subspace feemarket ElasticityMultiplier ...

Example Output:

key: ElasticityMultiplier
subspace: feemarket
value: "2"

gRPC

Queries

Verb	Method	Description
gRPC	ethermint.feemarket.v1.Query/Params	Get the module params
gRPC	ethermint.feemarket.v1.Query/BaseFee	Get the block base fee
gRPC	ethermint.feemarket.v1.Query/BlockGas	Get the block gas used
GET	/ethermint/feemarket/v1/params	Get the module params
GET	/ethermint/feemarket/v1/base_fee	Get the block base fee
GET	/ethermint/feemarket/v1/block_gas	Get the block gas used

AnteHandlers

The x/feemarket module provides AnteDecorators that are recursively chained together into a single Antehandler. These decorators perform basic validity checks on an Ethereum or Cosmos SDK transaction, such that it could be thrown out of the transaction Mempool.

Note that the AnteHandler is run for every transaction and called on both CheckTx and DeliverTx.

Decorators

MinGasPriceDecorator

Rejects Cosmos SDK transactions with transaction fees lower than MinGasPrice * GasLimit.

EthMinGasPriceDecorator

Rejects EVM transactions with transactions fees lower than MinGasPrice * GasLimit.

• For LegacyTx and AccessListTx, the GasPrice * GasLimit is used.
• For EIP-1559 (aka. DynamicFeeTx), the EffectivePrice * GasLimit is used.

tip

Note: For dynamic transactions, if the feemarket formula results in a BaseFee that lowers EffectivePrice < MinGasPrices, the users must increase the GasTipCap (priority fee) until EffectivePrice > MinGasPrices. Transactions with MinGasPrices * GasLimit < transaction fee < EffectiveFee are rejected by the feemarket AnteHandle.

EthGasConsumeDecorator

Calculates the effective fees to deduct and the tx priority according to EIP-1559 spec, then deducts the fees and sets the tx priority in the response.

effectivePrice = min(baseFee + tipFeeCap, gasFeeCap)
effectiveTipFee = effectivePrice - baseFee
priority = effectiveTipFee / DefaultPriorityReduction

When there are multiple messages in the transaction, choose the lowest priority in them.