Myself and the ICON team took some time to do some brief analysis of our transaction fees relative to inflation. We also compared to BTC, ETH, and XTZ. As many of you know, transaction fees are burned to counteract inflation, with the eventual goal of having transaction fees outweigh inflation. We certainly believe this is possible, but after looking at our current transaction fee we believe it makes sense to start increasing it.
- Transaction fees in USD are currently extremely low, unnecessarily low
- With our current average transaction fee, it would take ~43M transactions per day (~500 tps) to break even
- With 10x the transaction fee, we could be counteracting inflation entirely with ~4.3M transactions per day (~50 tps)
We propose raising the base transaction fee to 10 times what it currently is over a period of time, making sure it is not causing disruptions in the network along the way. Step Price adjustments are a built-in Network Proposal, so all we need to do is make the proposal and agree. However, there is a maximum increase in Step Price of 30% so it will take some time to reach the goal of 10x growth.
Operating Procedure: Every Tuesday US time starting next week, ICX Station will propose to increase the transaction fee. Each team only has ~24 hours to vote because of the current voting structure. We will observe the effects of these changes and adjust the pace of the increase as necessary (perhaps speed it up if there’s no impact or stop if ICON services become too expensive). If the vote does not pass because nodes reject the decision, we can discuss on this thread about next steps. If the vote does not pass because not enough teams had time to participate in the vote, we’ll shoot to resubmit the proposal the next day.
Here is a model that shows the numbers: