Free the Birds: the Case for Tokenized Gas

I just don’t see how it even achieves this. In my opinion, you are just introducing an additional completely arbitrary unit. There is no reason why it should track anything like transaction costs.

I also dispute the notion that there is such a thing as a bus that’s not full here. This may happen at the moment, as Ethereum is still in a very early phase. Once it’s a well-used network, there will always be a transaction with very marginal value waiting. Why shouldn’t there be? Why should there be a finite number of valuable transactions? It’s much more likely that there’s a power law of infinitely many, less and less valuable transactions potentially waiting.

Are you saying that commodity markets, indices, and futures are a waste of time and the world should buy commodities JIT-style only?

Block space is Ethereum’s precious commodity, and tokenizing it unlocks massive benefits and eliminates many pesky inefficiencies and risks. Let’s assume for simplicity that (a) fee payment must be paid in GAS exclusively (reminder: GAS is ETH-collaterlized) and (b) by consensus rules the minimum payment for 1 gas worth operation is 1 GAS token.

I did not say the bus is empty and, again, what to do when the bus is full is not within the scope of this proposal … that part is its own thing.

Then why could it not happen that a gas market develops where (1) the GAS token drops a lot so its value is much less than 1 GWei; (2) thus a lot more transactions become net profitable and compete for block space (3) due to the first price auction as currently implemented, no transaction paying less than say 100 GAS tokens per gas ever gets included?

I think that can perfectly well happen with your description of the system and thus I do not think the GAS token is pegged to the price of gas, or to the floor of the gas price, in any meaningful way.

Isn’t there a contradiction between 1 and 2 ?

If GAS price in ETH terms is crashing as (1) says then it must be the case that there is no demand for block space, because otherwise that demand would have started buying up that cheap GAS.

But if there is no such demand then why are there transactions competing for block space as (2) says?

You are making the assumption that GAS somehow represents block space. But it doesn’t because you don’t have any mechanism that fixes its price to it. That’s why your argument doesn’t work.

There could be a lot of demand for the GAS token, but only at 0.01 GWei. And lots of those could be created.