Thesis Details

Modeling and Simulation of Incentive Mechanisms in Ethereum

Bachelor's Thesis Student: Burianová Tereza Academic Year: 2021/2022 Supervisor: Perešíni Martin, Ing.
Czech title
Modelování a simulace vlastností poplatkových mechanismů v síti Ethereum
Language
English
Abstract

The topic of this thesis is the Ethereum incentive mechanism, in particular the changes introduced in EIP-1559. The aim of the thesis is to investigate the behaviour and propose any potential improvements in case of discovered flaws. The previously used first price auction mechanism required users to choose the incentive arbitrarily, which led to overpaying and high fee volatility. These problems occurred mainly due to higher network utilization after the popularization of projects such as decentralized finance, NFT collections, and the metaverse. The new incentive mechanism introduced the variable block size, which can adapt to the current network usage. Base fee, a value that indicates the minimum fee needed to include the transaction in the block, is then calculated based on the utilization of the previous block, making the fees more predictable. Several simulation experiments were proposed to investigate the typical behaviour and possible weaknesses of the mechanism. Finally, a possible improvement was found, and future research was proposed. The goals of the thesis were achieved, and the results were presented in the thesis.

Keywords

blockchain, cryptography, Ethereum, incentive mechanism, EIP-1559, London Hard Fork, modeling and simulation, base fee, block utilization, gas price volatility, tokens, ETH burn, Ethereum network congestion, DeFi, NFT

Department
Degree Programme
Files
Status
defended, grade C
Date
13 June 2022
Reviewer
Committee
Janoušek Vladimír, doc. Ing., Ph.D. (DITS FIT BUT), předseda
Burget Lukáš, doc. Ing., Ph.D. (DCGM FIT BUT), člen
Honzík Jan M., prof. Ing., CSc. (DIFS FIT BUT), člen
Mrázek Vojtěch, Ing., Ph.D. (DCSY FIT BUT), člen
Rozman Jaroslav, Ing., Ph.D. (DITS FIT BUT), člen
Citation
BURIANOVÁ, Tereza. Modeling and Simulation of Incentive Mechanisms in Ethereum. Brno, 2022. Bachelor's Thesis. Brno University of Technology, Faculty of Information Technology. 2022-06-13. Supervised by Perešíni Martin. Available from: https://www.fit.vut.cz/study/thesis/24237/
BibTeX
@bachelorsthesis{FITBT24237,
    author = "Tereza Burianov\'{a}",
    type = "Bachelor's thesis",
    title = "Modeling and Simulation of Incentive Mechanisms in Ethereum",
    school = "Brno University of Technology, Faculty of Information Technology",
    year = 2022,
    location = "Brno, CZ",
    language = "english",
    url = "https://www.fit.vut.cz/study/thesis/24237/"
}
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