Expected transaction costs on the network

Hey guys!

I have seen some discussion on the social media recently about increasing the transaction costs and I remember that there was such discussion a while ago and I was hoping for an insight of the planned changes in the near (and not so near) future

This would affect us greatly as we are currently planning to develop our platform (EPICX) with Fee 2.0 and Virtual Step integrated, which means that we will cover all tx fees. However due to the nature of some of the developed games, if we do rough calculation, on a placed 1 ICX prediction, we will have to pay more than 2% in fees, which in kind means that we have the following choices: to translate the fees to the players, to limit the prediction sizes (and respectively our player base) to a higher amount or simply run the platform at a loss for small prediction sizes

This issue will become greater with increase of the tx fees if such is planned, so I wanted to confirm what is the current status and the planned future actions on that topic. Maybe @Benny_Options would be able to provide some information about that?

I honestly feel that by increasing the fees we will be going in the wrong direction (we should be aiming for the opposite imho) and we will lose one of the main competitor advantages of ICON, but if that is what is decided, I would at least like to know as soon as possible so we could at least try to adapt to the incoming changes. Thanks!

1 Like

Hey @nblaze, please see the discussion here for the expected direction. There’s also a model there you can play around with. We held off on this because of the lack of internal controls on the network as discussed on twitter. Also, ICON 2.0 won’t have Virtual Step just as a heads up, but you’ll have at least 7 more months of transaction fee credits through the use of Virtual Step before the migration to ICON 2.0.

Also, everything regarding transaction fees can be revisited as we gather more data. We can make better judgement as more products launch and we get a better idea of transaction volume / fees paid

Thanks for the heads up Scott! Yeah VS would have been a good added value but we are not counting on it as something integral.

So if I understand correctly, there are still plans to execute a 10x fee increase. Let me give my 2c from what we have encountered. We understand that this decision has more components that are taken in mind when an action is decided, but I hope that this point of view is also taken into account as it might represent not only our app, but some of the potential future use cases on the chain.

In our 1v1 crypto duels game (in the way that it is planned), there are currently more than 10-12 txs processed per game (depending on the triggered search cancellation rate it could be a lot more). I will not go into too much detail as we have not yet released details of the game, however they roughly consist of:

  • player1 triggers a game search / player2 triggers a similar search or accepts pl1’s game (2 txs)
  • both players process their wager amounts (2 txs)
  • 3 rounds of player selections (6 txs - 3 x 2txs)

This results in 10 txs carrying information, which according to our experience so far are in the ranges 0.007-0.012 ICX each (we still do not know whether the ones for this game will not be more expensive and will not know until we release the game)

So far this results in (we are taking the minimum as a value) 10 x 0.007 = 0.07 ICX

These games however also trigger some ‘‘internal’’ transactions:

  • parts of the wager are sent to: the leaderboard pool, the dividend pool and towards the bank (3 txs each = 6 txs)
  • coins (EPX) are generated for each player, according to their wager sizes (still no idea how many txs will be needed here, but at least 2)
  • depending on the result from the match, the players are rewarded leaderboard points (which are needed for updating their rank) (2 txs)

These are usually less expensive (0.002-0.005 from what I have seen), but if we take the minimum one again that results in 10 x 0.002 = 0.02 ICX, so we are at 0.09 ICX minimum so far or 0.045 per player

Given that our bank cut is 2.5%, that means that if we allow a 1 ICX wager with the current fees, we will be at a almost 100% bank cut loss on such games. If the minimum wager is set at 2 ICX, we barely cover the fees with our bank cut

So that means that if the fees are increased by 10 times, we have to set the minimum wager for this game at 20 ICX and still barely cover the fees with our cut, which makes the game utterly obsolete and we will have to scrap it as if ICX jumps in price to 2$ in example, players will have a minimum wager of 40$, which is quite absurd

In these calculations we are not even counting the periodical and player triggered txs (and most of those are happening on a regular basis even if the player does not have any activity lately), such as:

  • dividend distribution
  • rank updates
  • status updates
  • profile changes
  • price feed
  • weekly / monthly pool updates and distribution
  • free to play monthly game related transactions etc etc

A valid option at the present time would be to not cover the fees, however in our development plan we have expressed the willingness to expand to other crypto chains and if we do it, we cannot force the holders on that chain to buy ICX in order to play on our platform, so our only option there would be to cover the fees. With the current fee levels, its not an easy task, but its doable. With fees increasing 10 times, it would be close to impossible to run the platform in its currently planned form.

We are aware that we are an isolated case at the moment as most of the other ICON apps are either financial or not very complex and if we would like to drive the chain that way, this is fine. However we need to do it with the proper mindset of what we expect to happen as higher fees limit what the chain could be used for.

2 Likes

Thanks for sharing all this information and it will certainly be considered. I’d say no need to worry about this just yet. When ICON 2.0 launches we’ll revisit the fee adjustment plans and we can discuss again then.

2 Likes