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Dev Update #3

My progress in the past several days

What I Have Done Since Last Update

Readings

I finished reading two articles in detail:

  1. Transaction Fee Mechanism Design for the Ethereum Blockchain: An Economic Analysis of EIP-1559 written by Tim Roughgarden.
  2. Understanding rollup economics from first principles

I have started writing my summary notes on these two articles, which has not been completed yet. You can find the current draft

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Progress on the RIG Open Problem 1

As I outlined in my last Dev Update, my immediate task is to finish cadCAD Bootcamp (Beginner Level). I have finished three sections and about to start section 4. Understanding cadCAD is critical to correctly simulate Ethereum economic models by updating parameters post-merge. This serves as the foundation for this specific problem I am trying to tackle.

What is Next?

On the specific problem side, I will continue my class with cadCAD. Given the time required to finish these two courses (cadCAD beginner and masterclass), I will dedicate most of my time in the next two or three weeks to those classes.

In the meantime, I will continue reading articles, research papers and blog posts.

Status Update on My Reading List

EVM

Ethereum Basics

Yellow Paper

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radCAD-Ethereum Economic Model Study Note

In this notebook, I study CADLabs Ethereum Economic Model in detail. The goal of this study is to understand the simulation model in detail and apply it to my own research on Ethereum blockchain (and layer 2) economics by extending the model to specific scenarios that I am interested in. One high level question we can explore in our research is as follows: What are the effects of Ethereum Proof of Stake Consensus Mechanism on Validators Revenues and Yields under Different Validator Environments and Network Scenario? High Level Overview of the Model The first step is to have a high-level overview of the model before diving deep into its individual components. In my view, the entire CADLabs Ethereum economic model consists of three main parts: Data: Historical data on ETH price, gas price, block rewards, used gas, and ether supply.

Mar 29, 2023
++Summary Note++: Empirical Analysis of EIP-1559

Article: Empirical Analysis of EIP-1559: Transaction Fees, Waiting Times, and Consensus Security This article was shared by many people when it first came out last year. I finally had a chance to read it thoroughly and understand the research problem in more details. I will highlight several key components of the article below: Main Research Problem The main research problem is to study the effect of EIP-1559 on several important aspects of Ethereum blockchain. Research Questions Three research questions are proposed in the article.

Feb 25, 2023
++Summary Note:++ Transaction Fee Mechanism Design for the Ethereum Blockchain

In this summary note, I will review and discuss two articles I have read in detail in the past several days. Article #1: Transaction Fee Mechanism Design for the Ethereum Blockchain: An Economic Analysis of EIP-1559 This article was written by Tim Roughgarden, who is a professor of computer science and member of Data Science Institute at Columbia University. I thoroughly enjoyed reading this article and learned a lot. The article mainly discusses game-theoretic strengths and weaknesses of Ethereum EIP-1559 by focusing on incentive-compatibility. Two major takeaways for me is the following: ++Block space is the scarce resource++. Each block has a target size of 15 million gas, which represents a limited computational capacity in layman's term. Therefore, users must compete for this limited resource such that their transactions can be included in a block. EIP-1559 effectively reduces the ++variation of transaction fee++, not the transaction fee itself. Reducing transaction fee is a scalability problem, not a TFM design problem. A direct implication of this outcome is easy fee estimation and improved user experience as a result. The variable blocksize flexibility reduces delays for some customers during the high demand period, thus also improves user experience. In addition, EIP-1559 achieves all those positive impacts without compromising security of the network.

Feb 25, 2023
Setting Up an Arbitrum Full Node

In this post, I share my own journey of setting up and running an Arbitrum full node in December. This process requires setting up an Ethereum full node as a prerequisite. In order to interact between L1 and L2, we need to run an L2 node as well as an Ethereum full node. As a result, I also set up and run an Ethereum full node from scratch. The entire post consists of four parts: Setup and run an Ethereum full nodeHardware Software OS Installation Ethereum Node Clients Installation Setup and run a Docker engine Setup and run an Arbitrum node

Jan 27, 2023
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