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Fees

Transaction fee​

The Transaction Fee in OverProtocol plays a vital role in maintaining the network's functionality and economic balance. Every transaction incurs a fee that is applied to sustain the protocol’s security and operational efficiency while also managing the supply of OVER tokens in circulation.

What is the Base Fee?​

The base fee is a core concept introduced with the adoption of EIP-1559, a widely recognized Ethereum improvement proposal. EIP-1559 replaces the traditional gas auction model with a dynamic pricing mechanism, making transaction fees more predictable and efficient. The base fee is a mandatory amount that must be paid for any transaction to be included in a block and is dynamically adjusted based on network demand.

In the protocol's initial stages, the base fee is collected and directed to the DAO Treasury, supporting various ecosystem development initiatives. As the protocol matures, the collection strategy evolves: instead of accruing in the treasury, the base fee is directly burned from each transaction. This nuanced approach balances the initial growth needs with a longer-term strategy of reducing token supply, thereby sustaining the protocol’s economic health.

Why is the Base Fee Set at 100 Gwei?​

In the early stages of OverProtocol, the minimum base fee is set at 100 Gwei, a deliberate decision to enhance the network's resistance against potential Denial of Service (DoS) attacks. While this may appear to result in higher transaction costs, ensuring network stability and security during its initial phase is a top priority.

Future Plans​

Storage Rent Fee​

The Storage rent fee is a charge on the contract accounts levied every certain period. It charges the use of storing data on the blockchain and reduces the total circulating supply of the OVER tokens.

Storage rent is a proposed economic mechanism designed to address the inefficiency of the 'pay once, use forever' model for state storage. In traditional blockchain models, once a user pays a fee to store data or execute a transaction, the associated data remains on the blockchain indefinitely, leading to an ever-growing state. This growth poses significant scalability and efficiency challenges.

With the storage rent fee, a blockchain storage user would consistenly pay the rent to compensate for the ongoing use of the storage space. This fee incentivizes users to only retain necessary and actively used data, thereby managing the size and efficiency of the blockchain's state. That is, we can expect users to be more judicious about the data they store on the blockchain and to potentially clean up or remove data that is no longer needed.

Such a fee is levied on every Ethanos epoch, and the amount depends on the quantity of data stored with the duration for which it was stored. The storage fee is collected and directed to the DAO Treasury, supporting various ecosystem development initiatives.

Why it was hard to collect Storage Rent Fees​

Implementing a storage rent fee design in conventional blockchain architectures is challenging due to the immense size of the state. For the protocol to levy storage rent, it must navigate through all state accounts to determine the appropriate charges and identify the account holders responsible for these fees. Additionally, the protocol needs to decide on the timing for such traversals. This process, under typical blockchain designs, presents significant complexities and operational inefficiencies, making the implementation of a storage rent fee system difficult. Consequently, in many cases, once a fee is paid for storing new values in the state, the space is occupied indefinitely, bypassing ongoing storage costs.

OverProtocol's Approach​

Through its innovative Ethanos technique, the OverProtocol effectively manages state size and introduces periodic intervals, streamlining the process of imposing storage rent fees. This approach allows for a straightforward determination of when and which contract accounts should be charged. The whitepaper, OverProtocol: Towards True Decentralization, elaborates on Ethanos, but here we present its core principles.

OverProtocol distinguishes between active and inactive accounts by resetting states at regular intervals, leveraging the consistency of activity across these cycles. Active accounts, identified by their continuous operation through cycles, are seamlessly transferred from the finalized state of the previous cycle to the current cycle's state. This transfer occurs at the first transactional interaction in the new cycle.

At this juncture, storage rent is levied on contract accounts, employing the efficiency of the Ethanos technique without necessitating external state traversal. This efficiency is further enhanced by the protocol's managed state size. Additionally, accounts in OverProtocol are equipped with metadata that assesses their storage size, creating a system where larger storage spaces incur higher rent. This design facilitates a fair and usage-based charging model.

The storage rent design is still under development, with the goal of establishing a user-friendly framework that simultaneously fosters a robust storage economy.