Paper by Kirk Baird, Seongho Jeong, Yeonsoo Kim, Bernd Burgstaller, Bernhard Scholz.

Updating the community about our new paper

Hey Fantomians, it’s been a while since we’ve got the honor to share our StairDAG research paper, but we’re elated to share another paper today which we believe will provide to be useful to the rest of the ecosystem. Our partners at Yonsei University’s Programming Languages Team and the University Sydney present: The Economics of Smart Contracts

Read the new paper on arXiv now!

About the paper

Ethereum is a distributed blockchain that can execute smart contracts, which inter-communicate and perform transactions automatically. The execution of smart contracts is paid in the form of gas, which is a monetary unit used in the Ethereum blockchain. The Ethereum Virtual Machine (EVM) provides the metering capability for smart contract execution. Instruction costs vary depending on the instruction type and the approximate computational resources required to execute the instruction on the network. The cost of gas is adjusted using transaction fees to ensure adequate payment of the network. In this work, we highlight the “real” economics of smart contracts. We show that the actual costs of executing smart contracts are disproportionate to the computational costs and that this gap is continuously widening. We show that the gas cost-model of the underlying EVM instruction-set is wrongly modeled. Specifically, the computational cost for the SLOAD instruction increases with the length of the blockchain. Our proposed performance model estimates gas usage and execution time of a smart contract at a given block-height. The new gas-cost model incorporates the block-height to eliminate irregularities in the Ethereum gas calculations. Our findings are based on extensive experiments over the entire history of the EVM blockchain.