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Transaction Fee Mechanism Design with Active Block Producers. (arXiv:2307.01686v2 [cs.GT] UPDATED)
cs.CR updates on arXiv.org arxiv.org
The incentive-compatibility properties of blockchain transaction fee
mechanisms have been investigated with *passive* block producers that are
motivated purely by the net rewards earned at the consensus layer. This paper
introduces a model of *active* block producers that have their own private
valuations for blocks (representing, for example, additional value derived from
the application layer). The block producer surplus in our model can be
interpreted as one of the more common colloquial meanings of the term ``MEV.''
The main results …
block blockchain design fee mechanism own private rewards transaction valuations