A comparative analysis of Ethereum gas price oracles' performance and a mechanism for Ethereum gas price prediction post-EIP-1559
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Blockchain transactions compete for limited space in blockchain blocks. Miners prefer to include transactions with higher fees into new blocks. Ethereum released EIP-1559 as an upgrade for its transaction pricing mechanism. The improvement proposal aims to stabilize the transaction pricing mechanism and improve the predictability of gas prices. In the context of Ethereum, gas price oracles predict fees such that transactions submitted at those fees make it into a block within a target delay. In practice, however, Ethereum gas price oracles are inaccurate, which makes it difficult for distributed applications to operate predictable services in terms of price and performance. To understand and measure oracle accuracy we define new gas prediction performance metrics. We demonstrate that oracles underprice transactions, causing them to miss the delay target. We also show that oracles overprice transactions, causing them to meet the delay target, but at a higher-than-necessary cost. As a result of oracles inaccuracies, users tend to either wait longer or pay more than sufficient gas prices for a transaction to get into a block. We provide a comparative analysis of five gas price oracles pre and post-the release of EIP-1559 showing their performance in terms of accuracy of acceptance, underpricing, and overpricing. We also discuss the factors that influence oracle accuracy and the effects of those inaccuracies in terms of time and money wasted. We apply our predefined metrics to study the performance of oracles pre and post-EIP-1559. We observe that EIP-1559 improved the transaction acceptance rate and shortened acceptance delays. On the other hand, we observe that EIP-1559 increased transaction overpricing. The current gas price prediction mechanisms required further investigation after the release of EIP-1559. Hence, we devised a new mechanism to predict gas prices of EIP-1559-compatible transactions on the Ethereum blockchain. The mechanism allows users to calculate gas prices based on the current block utilization and base fee. We measured the probability of acceptance, time wasted, and money wasted and noticed an increase in the probability of acceptance and a decrease in both time and money wasted in comparison to the currently existing oracles.