 Yes, I want to talk to you about kind of a first world problem. When you make your blockchain too good. And there you see that there are some, some problems that arise when your blockchain is too efficient and how to make an appropriate gas model for them so this is kind of my alternate title here so like my blockchain is too efficient and it makes my miners sad or so how can I make them happy again. But so I'll first I want to talk a bit about the principles of gas versus. I talk about the gas model so so what is gas so so gas is just like a unit of computational effort in the blockchain so every every transaction on the blockchain consumes a certain amount of gas which means like how much effort does it take the nodes of the network to confirm that transaction right and the idea said that so gas is scarce and precious resource right there's only a finite amount of gas that can be processed by by everyone in the network. So there is an optimal block size in terms of amount of gas that should be used per block, which is like the amount that can be consistently processed by the whole network. Consistently. That's kind of an engineering constraint that this is how much we can process so this is the final sub finite supply there is some gas. So we should sell this gas like this space on the blockchain appropriately to the most valuable transactions only right so kind of to get on the blockchain you have to pay proportionally to the amount of gas you're consuming. So the blockchain and this gas should be sold that's what is called a market clearing price, which is basically the price that only the most valuable transactions can pay right and So what I what I want you to think about what we'll be considering this talk is like what if we are engineering got so good that now we have an infinite capacity blockchain where we can fit everything we want on it, because like our engineers are awesome or something so now we have a blockchain where we can fit anything. Right. But so so kind of to think about how would gas would work in this scenario. And so, first, for going there so I want to talk about this so okay so so we say okay gas should be sold at this market clearing price this is what users of the blockchain to pay for gas. But then there's a question of how do we reach this price okay so how do, how do users find out what's the appropriate price that they should pay for gas so there's kind of two main ways to do this there's the original like Bitcoin model which is like the first price auction, which basically means that every, every gas user just makes a guess about what they think the market clearing price is, and the highest guesses get to be on chain. So, this kind of tends to be very volatile and inaccurate involves a lot of guesswork so it's like I think this is the amount of demand right now so let me make the speed. It's very subjective and so the problem there is like, right so there's a lot of volatility involved in the, you know, this guesswork so. So what Falcon uses and actually was proposed for the first for Ethereum blockchain, and this kind of Ethereum proposal EIP 1559 is the as this 1559 approach with where the idea is that how gas fees work is that you know what you pay for gas is a base fee, plus a minor tip where the idea is so this base fee is something that that is a fixed amount, I mean that that everyone can see what the amount is so they know what to pay for it. And this base fee is evolved algorithmically based on the demand on the network so kind of it eliminates this guesswork, right. So you can see what is a base fee and you pay it and then on top of that you can pay a minor tip that so the idea is that this base fee will be just burned. It will not go to the minor as in the Bitcoin model where all the payment goes to the minor. And only this, this tip amount is what what the minor rule will earn. And then so there's an algorithm involved here to kind of decide what the base fee is but the point is it's not up to guess work anymore to try to figure out what it is like. It comes from the amount and you have this value you can look at. And there's a portion that is burned on a portion that goes to my. So, then, so there's two mechanisms I discussed so there's the first price option mechanism of Bitcoin and the EIP 1559 mechanism of Ethereum and Falcone. So they are not what determined what the price of gas should be right so it's not like introducing this sort of mechanism will lower gas fees it will just make it personally less volatile and easier to use and so on but price. The price of gas strictly comes just from supply of demand and demand but there's there's a what I have here so you have your block size, which I called here be. The size of the mean pool. So there's a number of messages out there that want to get in on the chain, but only an amount be of them can get in. So, if you have a change in like the fraction of the messages that can get in then this micro price will change so it's basically like how many messages of the ones that want to get in can actually fit in the blockchain. And that is what sets the kind of this market price. So, so I want to talk also a bit about like, so when do these transactions get on the chain, right so so like user wants to make a transaction it will get on the chain when both the minor and the users are happy about it. So, so, but for that reason the way to think about it is this kind of like what is the utility to the minor of including your, your transaction on the chain and kind of what is the utility of the for the user of having that their transaction get in the chain. So this, there's a nice more thorough analysis in this paper by Timber of Gardens so this is kind of a very simplified version of it. So this is kind of what this utility looks like in this kind of Bitcoin first price option model where basically, okay so this is the utility of the minor which is minting the blog like how much will they will they gain from putting all these transactions in the block. So there's a contribution from so you're summing over all the transactions see that go on the blog. And so these are the transactions that form part of the blog that is being minted. And the transactions that get on the blog are a subset actually of the larger mean pool of transactions that are there that want to get on the blog. And every transaction there spends an amount of gas. G for that transaction is the amount of gas that transaction consume. And this is the amount. This is the payment, what the user paid to get that the transaction in there. And in the, in the Bitcoin kind of case, this payment just goes to the miners it is like a positive contribution here so is the price they paid for the unit of gas. And this, this negative term here is just the operational operating costs to the minor of including your transaction or so. And the miners need to spend a certain amount of effort to just include the transactions that they would rather just submit an empty blog because it's easier. So it cost them an amount of effort mu right. So as long as they pay a larger amount than this minimal effort that the miners make in then the miner is happy. Because they get a positive result. So they just need to overcome the operating costs of the of the minor. And for the user is just so so they want to send this transaction and the user has this kind of value that they attached to this transaction. So this is like how much it means to the you how much does the user value that this transaction gets through and as long as the value that they place on having the transaction and chain is greater than what they had to pay for it. Then they will pay for it. And so this idea so if these utilities are both positive then transactions happen and everyone's happy. Yeah. Now. So this is what this utility functions look like for the IP 1559 and this is the things start getting a bit more weird and complicated. So, the difference here is only for the minor that. So you have what the client pays what the user pays and what what the operating costs for the minor are, but now there's also this base fee that will not go to the minor body will just get burned. Right. So this are here represents the base fee. So, so, so the idea is here that so the optimal client for what a what a, the optimal strategy for a user that wants to get into the chain is they should pay an amount for their gas that kind of barely covers this too. So as long as they pay for the bear fee, the base fee, and they just barely pay for the operating costs and that's that's good enough to get in there. But the idea is that this base fee kind of eats away. Most of potential what would have been profits to the minor so that is that this utility, it always stays kind of near zero, while the user utility doesn't really change under the IP 1559. Yeah, so this is kind of a kind of a weird point here. Okay, so, so minors derive zero utility from including all your messages on the chain, why would they bother. Why don't they just submit bunch of empty blocks. Why would they bother submitting any messages at all. So one question is like the CFP 1559 just take away all the happiness from the minors and and so, so, so, yeah, the details. So there's, so the point is there should be actually like an extra term here. So this is not the end of the story. And what is missing in this utility for the minor is that it's basically this principle that, okay, so, so fees are getting burned. And fee burning is supposed to make everyone every token holder of the network happy if someone else burns some fees right so that makes your own tokens more valuable so so fee burning should make everyone happy and minors are a subset of everyone so therefore fee burning should also make minors happy in some amount. And this is the kind of the term that we need to add here to describe that. So, so this part is all part basically stays around zero this doesn't contribute much. But there's another utility so they want to include messages on the chain because that will get gas burnt and that will increase the value of the tokens that they have so here we have so this is kind of the wealth the amount of tokens that the the miner is holding. And this is the block reward that they are earning and having users burn their fees will increase the value of their wealth and their income of block reward so basically so so here we have the difference between like what their wealth would be worth if nothing was burned versus what is worth now that this amount of fees were burned. So this is kind of the this is the circulating supply, like how many tokens there are on the network and there used to be as amount of tokens in the network and now there's this amount less. So like reducing this amount increases the value of what I have. So, so there is still a benefit to minors from where it is talking so the idea is that they still want to include your transactions on the chain because it makes them happy and it also makes everyone happy but they are subset of everyone so they should be happy. So the point here is in either mechanism like, so you have first price options or you have EIP 1559 and these are the different utility functions. What miners want to do all the time is like they just want to maximize their happiness right they want to maximize their utility so these two functions they want to maximize it. And both of these are maximized by having a more payment right so like higher so so if more amount gets paid so they are both maximized by maximizing the same thing so like, like, how much was paid. So like, how much gas was consumed and times what price that gas was sold for right so it's kind of like the total network revenue for that block so so in both cases minus one to maximize for the same thing. Now, in, in our current state, my son minus one to maximize for this thing but it's not up to them, they don't get to maximize for this thing because so this is outside of their control. So this is what what gets run like they can decide that. But enter. So here's where we start getting interesting issues so let's say like we have awesome engineers that solve the problem of scalability on the blockchain now like the blockchain is so efficient that we can include all the transactions in there that we want so all of them in pool of messages they can be included in every block all the time there's no engineering issues about that. So the problem with that is, okay so if all the, as I said, if all the transactions that want to get in can get in without any competition that will basically like drive the base fee to zero absolutely there. And then like the client just needs to barely cover the operating costs and nothing on top of that. So in it, blockchain in both case reduce the utility to the miners to zero so they're like, why would I bother doing it so there's nothing in first okay so now I can include all the messages out there but they gain nothing by doing that. Right, when they were doing so, if you take their finite blockchain right now where they're gaining some utility and you give them an awesome engineering vice blockchain where they can include anything. That's fine, because I go my profit went away. So, so the idea is that infinite blockchain that is perfectly efficient takes away all the happiness from miners. This is kind of the paradox. This is in a first price option world is kind of wouldn't be a real issue in the sense that. Okay, so, so the miners in a Bitcoin world would just not really include all the transactions they would just include a subset of the transactions that they will decide so they will set an effective block size so so they'll say I'll allow in only this amount of gas. And the amount of gas that they will allow in will be the one that maximizes the profit. So like the price of. This artificially introduces some competition to pay to get into the blockchain so this will give some non zero price for the gas right. And so they will so this is kind of the amount of profit that they will make and they will choose the, the effective block size that will maximize the profit so even if they have the capacity to to put the messages, if, if the miners are allowed to they will not include all of them, they will include the amount that will maximize the profit. Now, there's an issue with this with in and I ep 1559 world which is that the block size is not up to the miners so this is part of this base fee updating formula so so this. The worst is that this is your base fee at the previous blog, and there's this formula that will tell you whether the base fee will decrease or or increase. And this is based on a target block size. So it's like, did more was more gas burned at the target then make the fee more expensive and it's less was burned at the target. So it will make it less expensive but this is built into ep 1559. And right now this is set as this like the maximum we can, but we can really efficiently process consistently. So if we make that blockchain infinite, we need a way to not put infinity here because that will just drive base fee to zero so kind of this could be fixed in a more convoluted way and making this kind of two step ep 1559 were the the idea of block size is the target block size is updated also in a way that maximizes the utility to the miners. So something like this would be the idea so what you would need something that fixes an optimal block size if you can include everything. Yeah, so this would be the case. So this is how you would do it if you're running, if you have like infinite blockchain Ethereum okay maximized the burn. But Falcon has kind of unique problems in which the things that proving storage which is what the miners need to do is actually very, very gas costly so. There's a plot here of the gas usage in Falcon by different kind of of uses of gas, and all of these first uses here until others these are all storage provider related. This is the gas that they spend proving their storage it takes a lot of gas and the rest of the users are just this others which you can barely make out here so most of the gas is being consumed by the storage providers, which brings us like more complicated. Okay, so if other people were paying for this gas and they want the gas to be expensive but now they are paying for their own gas so it makes things more complicated. Excellent. Just a quick time time check we've got about two minutes left. Yeah. Yeah. So this kind of a problem here kind of means that the first price option wouldn't be a good option for Falcon that's kind of a reason why it doesn't work there because it will just means like lead to option agreement where the storage providers sort of lower the gas fees for while leaving expensive gas fees for the rest of the users. So this is kind of why like 1559 is kind of more fair for Falcon that keeps the same gas fees for everyone. But in this case, so we need to yet again modify what is the utility function to this Falcon storage providers were what we added here now is like this negative term which is the rate at which they need to burn gas to prove their own storage right so so they're gaining utility by other people burning gas but they're losing utility by themselves having to burn gas. And kind of so now minus one to maximize their utility and it's kind of a different utility for every minor they have their own wealth and their own current rate and their own revenue. Yeah, so so it's a harder question. So how do I, what, so how do I choose the target block size that makes most people happy so then there's different options you can look so this is an open question where I want to kind of leave it near here Okay, so maybe we want to optimize the utility for the median storage provider that has a median amount of wealth and we don't want to burn and so on. So kind of they want more gas to be burned but they want the base fee to be cheap so they don't have to spend that much so it's like a more complicated type of balance and the last thing is that the situation should improve for minors once at PM comes online in the in the sense that at PM will bring about like a lot more other kinds of gas usage that will mean that other users will be spending more gas not only the source providers, which means that, yeah, will make it easier for guidance for for the source providers to increase their utility because they will not be the larger there are just consumers of gas anymore. Yeah, this is some details on like how Falcon actually wants to achieve this kind of infinite blockchain with heretical consensus but you can skip those details for now. So yeah, thanks a lot.