Thank you for the response. I’ve been thinking more about what you’ve said and have a couple questions/comments.
First, with regards to my comment about transactions per day, I was making a lot of assumptions but was more referring to the burn rates from the current block size and burn mechanism.
From my understanding, the block gas_target is set at 15,000,000; at B = I equilibrium, so on average, the gas consumed per block should be this amount. At a block time of 12 seconds, there should be about 2,628,000 blocks per year; so the total consumed gas per year should be around 3.942x10^13.
Burn (B) = Gas_used * Base_Fee
Issuance (2^19, 2^20) = 681,574 and 963,892 ETH
When I = B; Base_Fee = I/Gas_used
- at 2**19 validators, average Base_Fee should be 17 (ETH transfer should be 0.00036 ETH)
- at 2**20 validators, average Base_Fee would be 24 (ETH transfer should be 0.0005 ETH)
- lately, simple ETH transfer would be around 0.0021 ETH at base_fee rates of 100gwei
This might not be the best analogy, but I think of base_fee as a proxy for volatility in order flow with low base_fee indicating a much more stable gas_consumption market. Thus, as ETH becomes more scarce, I would expect the base fees to stabilize towards these values. I think it is interesting to think about what type of factors would be driving this, as it appears to me, that the ETH cost to transact on mainnet will decrease over time, even if demand increases.
I think this may also be helpful in modeling costs of transactions for the future based on the assumption there will be a limited amount of gas available from issuance. I still have more to think about on this topic but would be interested to hear any of your thoughts.
With regards to minimum viable issuance, it seems that as issuance drops this will lead to further reductions in average base_fee and thus less flexibility in handling fluctuations in transaction volume. While it seems like all of these things will help stabilize the ETH cost of transacting on the network, I think this would translate to a significant increase in fiat-denominate ETH prices as demand changes.