[Fees] Volume Dependence and Spam Protection

With the passage of the volume dependent motion, the network is in clear support of such an improvement. This thread is to talk about what we use fees for, and how volume dependence fits in.

Spam Protection
The fundamental reason that peercoin implemented the 0.01 fee and Nu implemented variable fees was to protect against spam attacks. There are two types of spam attacks:

  1. DDoS and 2) Blockchain Bloat
    Both of these are continuous threats to the network that may want to be handled dynamically in the future. The current solution is excellent at dealing with type 2 and more effective than a static fee at dealing with type 1. Keeping this parameter finely tuned is vital to the network.

Volume Dependence
The purpose of this feature is purely to increase revenue. Standard payment structures use percentage fees to get the job done and we should try to do something similar. There are complications and such that arise, but ultimately a transaction volume sensitive number can be calculated and the market will adjust (if we do it right). Ultimately, the shareholders will be in control over how much money is made from fees, which is a natural method by which payment processors raise money. Keeping this parameter finely tuned is also of great importance to the network.

The Problem and the Solution
Spam protection and profit are two different mechanisms that need to be tuned independently. We need to have two different voting parameters written on the blockchain to control them separately. For instance, say we choose a % fee that can be voted on to control our profit from fees; we should also have a minimum flat fee that is also voted on for spam control. If there is a DDoS attempt on the network we will want to vote for a very high spam fee without drastically reducing the usability of our network for large customers, which would happen if we spike the % fee.

Proposal: We should vote on a volume dependent coefficient separately from the size dependent fee that acts as spam protection. Any Tx will be charged the greater of the two amounts.


I certainly agree that we need to maintain two fee structures just as you have outlined. The design of value based fees hasn’t been finalised yet, but it will certainly involve a separate and new item for minters to vote on and adjust as needed.