Dynamic base fees
Base fees accounting for actual demand
Last updated
Base fees accounting for actual demand
Last updated
Transaction pricing on the X1 Blockchain includes base fees and priority fees.
Unlike Ethereum's single-thread execution, X1—similar to Solana—leverages the server's expanded capacity through parallelism, allowing transactions to be executed across multiple threads. Priority fees act as a voluntary tip to validators set by users, facilitating prioritization within the local fee market threads.
Solana's transaction fee market is primarily driven by local fee markets that prioritize transactions within individual blocks. The base fee for transaction signatures on Solana is statically set at a fixed rate of 5,000 lamports. This fixed fee structure is inadequate for applying sufficient economic back pressure during periods of high network demand. As a result, the network is more vulnerable to spam transactions, which can reduce overall network efficiency and degrade the quality of service. Solana does not employ a global block Compute Unit (CU) accounting mechanism. Without this, transaction fees do not dynamically adjust based on the overall demand on the network's computational resources. During peak periods, the lack of a global adjustment mechanism can lead to network congestion and performance bottlenecks, as low-priority transactions continue to compete for compute resources without any economic disincentive.
The X1 Blockchain dynamically adjusts base fees based on global compute-unit (CU) congestion across its threads. The transaction fee structure accounts for the computational resources consumed by transactions, which are constrained by a block size of 48M CU per block. Transactions that require higher CUs incur proportionally higher fees. As thread capacity becomes more utilized and blocks fill up, a multiplier is applied to transaction pricing, making them progressively more expensive.
This dynamic fee scaling mechanism on the X1 Blockchain is designed to create economic back pressure that aligns transaction prioritization with available network capacity. As the network load increases, the corresponding rise in transaction fees discourages non-essential transactions (including bots and spam), reducing the likelihood of network congestion. This strategy optimizes resource allocation and ensures sustained high performance under varying network conditions.
Ethereum utilizes a single-threaded execution model with global base fees, which leads to high transaction costs during periods of network congestion.
Solana, on the other hand, features multithreaded execution that supports local fee markets, generally resulting in lower transaction costs. However, its base fee pricing mechanism does not account for a transaction's computational usage, allowing spam transactions to occupy computational resources.
The X1 Blockchain combines the strengths of both systems. It supports parallel execution utilizing multiple threads, which allows for local fee markets similar to Solana. Additionally, X1 adopts a global base fee enforcement strategy with congestion-reflective dynamic base fees. This approach discourages spam by adjusting transaction fees based on the actual computational load they impose on the network, ensuring that transaction pricing is fair and proportionate to resource usage.
The implementation of dynamic base fees on the X1 Blockchain offers several beneficial effects:
The dynamic base fee system ensures that the cost of a single transaction remains low and only increases when the usage of the chain rises. Additionally, as the chain experiences more usage, validators earn progressively more, and the chain itself becomes more deflationary due to increased native coin burns.
This deflationary mechanism means that over time, the blockchain becomes more valuable with fewer transactions. Validators benefit from higher earnings without needing a corresponding increase in transaction volume.
By aligning resource allocation with actual demand, the pricing strategy for X1's transaction fees promotes efficient, cost-effective transactions while minimizing spam. This approach ensures that the blockchain maintains high performance and reliability even as it scales.
