Stochastic Properties of EIP-1559 Basefees

Abstract

EIP-1559 is a new proposed pricing mechanism for the Ethereum protocol developed to bring stability to fluctuating gas prices. To properly understand this as a stochastic process, it is necessary to develop the mathematical foundations to understand under what conditions the base fee gas price outcomes behave as a stationary process, and when it does not. Understanding these mathematical fundamentals is critical to properly engineering a stable system.

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