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Anders Elowsson

@anderselowsson

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Anders Elowsson pfp
Anders Elowsson
@anderselowsson
The apples have a short shelf life and should be sold fresh to avoid waste. Furthemore, the friends want to feed the world and grow their business, so they do not mind attracting new customers with low prices whenever possible, given that the apples would have been wasted otherwise.
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Anders Elowsson
@anderselowsson
Grown-up are directed to the discussion on Ethereum Magicians. https://ethereum-magicians.org/t/eip-7918-blob-base-fee-bounded-by-execution-cost/23271
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Anders Elowsson
@anderselowsson
That's it, although they are still discussing some nuances—perhaps the price of 6 apples should be allowed to fall to 20% of the bus price, etc. While not everyone comes by bus, all transportation costs depend on the gas cost. When the cost for traveling by bus or a Kia Optima changes, the cost for traveling by a ZK rover also changes. The friends are thus ensuring that all customers always care, at least a little, about the apple price that Audrey calls out, and she can therefore do her job regulating apple demand with business running smoothly.
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Anders Elowsson
@anderselowsson
During their discussion, the friends have figured out that apple demand depends on both apple price and transportation costs. They discuss quirks and alternatives, perhaps bus travelers are just stopping by for a snack on their way home, perhaps demand for apples is inherently rather fixed anyway, and perhaps it is impossible to know how many apples customers will buy on average each auction round as the orchard grows? Perhaps Audrey should just change her auction mechanism? While there are many nuances, they want something simple that they can implement tomorrow, yet theoretically sound and generally considered fair and neutral by their customers. The friends therefore decide on the following: * Therese checks the price of a bus ticket and shares it with Audrey, * Audrey stops reducing the price when the total cost of the 6 apples that the orchard produces each round equals the bus ticket price.
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Anders Elowsson
@anderselowsson
Audrey believes this would be great for her auction as well. "I have a great auction mechanism as long as people care about my price tweaks. But when the gas price is much higher than the apple price, nobody cares. I could double the price of an apple from $0.000000001 to $0.000000002, and the total cost of driving here to buy the apple goes from $10.000000001 to $10.000000002. It's like adding a water drop to the ocean."
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Anders Elowsson
@anderselowsson
"What if someone only has $0.50 to spend on apples but the bus ticket is $1? They wouldn't be able to buy any apples, no matter how cheap we make them. What if someone has $5 to spend on apples but there are no buses from their house and gas is $10? They also could not buy any apples even if we set the price to 0. We have been thinking about the millions upon millions of apples someone could buy when the price is a tiny fraction of a cent, but did not account for transportation costs." Therese nods. "We're not even helping people by selling apples for $0.000000001 if they still need to pay $1 for the bus or $10-$50 to go by car. We might as well charge something closer to the bus ticket price. We could adapt if it changes to ensure that we are as fair and helpful as we can be."
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Anders Elowsson
@anderselowsson
The same pattern repeats for several days and the friends realize that they have to rethink their apple pricing mechanism. But first, they would like to understand what is going on. Perhaps there is some theoretical explanation why the price varies between tiny fractions of a cent and hundreds of dollars? Pontus goes for a pondering stroll by the parking lot, watching customers arrive. Because the garden is huge, no one can reach it by foot. Some *roll up* in fancy big cars that seem to be real gas monsters. A ZK rover just parked, it must be quite expensive to travel to the store in one of those, perhaps $50? Others arrive by bus and a customer tells Pontus the cheapest ticket is $1. Pontus gets an idea and hurries back to tell the others.
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Anders Elowsson pfp
Anders Elowsson
@anderselowsson
All in all, it takes six long hours of this commotion until prices return to normal and the line finally thins out. Phew—what a day!
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Anders Elowsson
@anderselowsson
Later that day, demand picks up. Customers swarm the stand, waving money to secure an apple. But Audrey follows the same rule as always, raising the price by 10% per round. It takes seven rounds for the price to increase from $0.000000001 to $0.000000002, and this does not seem to have any effect on demand. Customers try to tip extra to jump the queue, but it's difficult to run the stand that way; things were easier when Audrey had control over apple demand.
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Anders Elowsson
@anderselowsson
However, the next day a very strange thing happens: when Audrey lowers the price, there is no increase in demand. You hear her calling "Apples for $0.01!", a few hours later, "Apples for $0.0001!", and the next morning "Apples for $0.000000001!". The friends are stunned, they were sure thousands of people would want apples at these giveaway prices. They know they're selling prime apples, and at this price, millions upon millions of apples could be bought for just a dollar.
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Anders Elowsson
@anderselowsson
The friends' orchard currently produces an average of 6 fresh apples every 12 seconds. To set the price, Audrey counts how many apples are sold in each 12-second round and keeps the price fixed if exactly 6 apples are sold. She increases the price by around 10% if more than 6 apples are sold (Pontus sells up to 9 apples when working the fastest he can), and decreases it similarly if none or just a few apples are sold. This is generally a sound approach. The apples are tasty and the friends are sure there will always be demand if the price becomes low enough. The first day, everything runs smoothly and the price rises and falls as expected with changes in apple demand. You hear Audrey announcing "Apples for $16!", and 12 seconds later "Get your apples for $15!", etc.
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Anders Elowsson
@anderselowsson
I'll share the story as thread, but this markdown version may make for a more comfortable reading experience. https://notes.ethereum.org/@anderselowsson/AIG
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Anders Elowsson
@anderselowsson
Apples of the Infinite Garden: A Children's Book on EIP-7918 Audrey the Auctioneer, Pontus the Ponderer and Therese the Tree Tender have started an apple orchard in a huge garden. The friends have a vision: feeding the world with apples. Let's follow them on their journey 🧵👇
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Anders Elowsson pfp
Anders Elowsson
@anderselowsson
Finally, here are histograms of the 3 fee models for the four-month period from November 2024 through March 2025. Neither EIP-7918 nor EIP-7762 dropped below 0.01 gwei. It would have been a meaningless level during this period since the cost of execution gas then dominates. Fin.
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Anders Elowsson
@anderselowsson
Note that thresholding is applied directly to the original data, without accounting for its effect on the equilibrium fee. The equilibrium blob base fee would in reality rise above the threshold once demand exceeds target supply at that fee level.
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Anders Elowsson
@anderselowsson
For three weeks in March 2025 the average execution base fee was instead 1.3 gwei. Under such conditions, EIP-7918 instead sets a lower floor than EIP-7762. Thanks to @soispoke for providing the data.
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Anders Elowsson
@anderselowsson
Question 4: what is the historical empirical impact? Here are three weeks in November 2024 when the average execution base fee was 16 gwei. EIP-7918 would then have set a higher floor than EIP-7762. The Pectra target of 6 blobs was used for amortization.
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Anders Elowsson
@anderselowsson
Concerning implementation complexity: * EIP-7762 changes one constant and adds block_timestamp as an input variable to calc_excess_blob_gas(). This input is included in an if statement evaluating timestamps, returning 0 if TRUE. * EIP-7918 adds one if statement to calc_excess_blob_gas() evaluating computed gas prices, altering the return to be parent.excess_blob_gas + parent.blob_gas_used // 3 if TRUE. Whether one change brings more complexity than the other is hard for me to tell. They should both be fairly similar and both be straightforward.
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Anders Elowsson pfp
Anders Elowsson
@anderselowsson
The figure shows that the floor under EIP-7762 remains fixed at 2**25 wei (blue). The floor under EIP-7918 varies with the execution base fee; under Pectra settings along the black arrow. If the blob target increases to 12, the floor adjusts down to the grey arrows, etc.
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Anders Elowsson
@anderselowsson
EIP-7918 also accounts for future scaling. The cost of (providing) 128 kB of DA will fall drastically over the next 50 years due to improvements in hardware and software. EIP-7918 reduces the price floor when target blobs increases to reflect this.
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