User Welfare in Cryptocurrency Transaction Markets: An Empirical Study on EIP-1559
Files
Date
2024-01-03
Authors
Contributor
Advisor
Department
Instructor
Depositor
Speaker
Researcher
Consultant
Interviewer
Narrator
Transcriber
Annotator
Journal Title
Journal ISSN
Volume Title
Publisher
Volume
Number/Issue
Starting Page
5101
Ending Page
Alternative Title
Abstract
Guaranteed by the novel technical design, blockchain-based platforms can ensure the authenticity and transparency of transactions. However, compared with traditional ways of trading, the transaction throughput is usually restricted in blockchain networks, and users have to compete for limited block space. On Ethereum, a featured permissionless blockchain-based platform, users conducted various activities in a name-your-own-price way. Users faced uncertainty about how to bid appropriately and were prone to severe overpaying problems. Taking advantage of the upgrade of the Ethereum transaction fee mechanism on August 5, 2021, we describe the logic of user bidding and analyze whether the new transaction fee mechanism introduced by EIP-1559 helps increase user welfare. Through empirical analysis, we revealed that EIP-1559 could alleviate user overpayment, especially among addresses with lower transaction values. In addition, observations of bidding performance with EIP-1559 across time proved the existence of learning effects.
Description
Keywords
Web3 Technologies for Digital Innovation and Transformation, blockchain, cryptocurrency, transaction fee, user welfare
Citation
Extent
10 pages
Format
Geographic Location
Time Period
Related To
Proceedings of the 57th Hawaii International Conference on System Sciences
Related To (URI)
Table of Contents
Rights
Attribution-NonCommercial-NoDerivatives 4.0 International
Rights Holder
Local Contexts
Email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.