Priority Fee: The Silent Battle Between Solana and Arbitrum

Summary: This article analyzes the concept of “priority fee” – a seemingly simple factor that has a significant impact on the economic structure and user experience of blockchain networks. The article will compare the approaches of Solana and Arbitrum to priority fees, and discuss the debates surrounding it.

Priority Fee: The Concept and Its Importance

Have you ever wondered: “How can I get my transaction processed the fastest on a blockchain network?”. That’s where priority fee comes in.

In addition to regular transaction fees, some blockchain networks require users to pay a priority fee to speed up their transaction processing. In other words, you’re “telling” the network that your transaction needs to be prioritized!

Updates on Priority Fees

Recently, there have been notable updates regarding priority fees:

• Solana: Solana has implemented the SIMD-96 proposal, which redirects all priority fees to validators, instead of just half as before.
• Arbitrum: The Timeboost proposal has been introduced to reduce the occurrence of spam bots on Arbitrum.
• Taiko: Taiko, a base-based rollup, has proposed lowering priority fees to an optimal level for users.

The Battle Between Solana and Arbitrum

According to Click Digital, the battle over priority fees between Solana and Arbitrum is getting fierce. These two ecosystems have contrasting views on the role of priority fees.

• Solana: Solana tends to focus on performance, with a very high proportion of priority fees in the total revenue for validators. This indicates a high demand for prioritized transactions on the Solana network, and spam bots are willing to pay a lot to execute arbitrage transactions.
• Arbitrum: Arbitrum prioritizes a fairer mechanism based on the “first come, first served” principle. However, they are facing tremendous pressure from spam bots lately, especially with the deployment of many airdrops on layer 2 networks.

Debates Around Priority Fees

Debates surrounding priority fees often center around these points:

• Average transaction fee calculation: Solana argues that calculating the average transaction fee on the network doesn’t accurately reflect the actual demand and that a median calculation would provide more accurate results.
• Transaction performance: In addition to transaction throughput (TPS), people are starting to use transaction fee as a metric to evaluate network performance.
• Transaction failure rate: Solana has a higher transaction failure rate than Arbitrum due to its wider bandwidth and more aggressive bot spam activity.

The Importance of Priority Fees for Users

Everyone usually pays less attention to priority fees when performing ordinary transactions like swaps or sending funds. However, this concept is very important for those who want to monitor the market and make investment decisions.

Priority fees have a significant impact on the economic structure of blockchain networks:

• Solana: Redirecting priority fees to validators will create a more balanced economic structure, providing validators with a more stable source of income.
• Arbitrum: Using priority fees to reclaim value from spam bots is an effective way to protect the network.

In conclusion: Priority fees are an important concept to keep in mind when participating in activities on a blockchain network. It impacts the economic structure, user experience, and performance of networks.

Stay tuned to Click Digital for the latest updates on priority fees and the newest developments in the blockchain world!