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Introduction

Cowboy implements two independent EIP-1559 style fee markets: one for Cycles (computation) and one for Cells (data/storage). Each market has its own basefee that adjusts dynamically based on demand, ensuring fair pricing and preventing congestion.
Key Innovation: Independent basefees allow compute-heavy and storage-heavy applications to coexist without subsidizing each other.
Note: Content on this page is principle-level. Normative specifications (formulas, constraints) are defined in CIP-3.

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EIP-1559 Recap

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Traditional EIP-1559 (Ethereum)

EIP-1559 introduced a basefee mechanism to improve fee predictability: Fee = (gas_used × basefee) + tip Key properties:
  • Basefee: Algorithmically adjusted based on block utilization
  • Burn: Basefee portion is burned (deflationary)
  • Tip: Goes to block producer (incentive for inclusion)
  • Target: Blocks aim for 50% utilization
  • Adjustment: Basefee increases if over target, decreases if under
Limitation: A single gas metric cannot fairly price different resources.

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Cowboy’s Dual Basefee System

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Two Independent Markets

  • Cycles market (computation)
    • Adjusts the price of compute work (Cycles)
    • Responds to compute usage; independent of Cells
  • Cells market (data/storage)
    • Adjusts the price of data/storage (Cells)
    • Responds to data usage; independent of Cycles

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Update Rule (per resource)

  • Basefee update (per block, per resource x ∈ [Cycles, Cells]):
    • U: usage in parent block; T: target usage (typically 50% of limit)
    • α: adjustment speed (elasticity multiplier; larger means smoother)
    • The change is clamped to a maximum per-block percentage (e.g., ±12.5% when α = 8)
  • These parameters and clamping behavior are specified in CIP-3.

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Basefee Properties and Parameters

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Parameters (per CIP‑3)

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Economic Effects

  • Basefee burn (100%): The basefee portion of fees is burned, creating a deflationary pressure linked to actual network usage.
  • Producer tip: Tips are paid to block producers, forming a priority market layered over the basefee.

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Fee Calculation & Distribution (Per Transaction)

  • For each resource:
    • Basefee payment: usage_x × basefee_x (burned)
    • Effective tip rate: min(tip_per_x, max_fee_per_x − basefee_x)
    • Tip payment: usage_x × effective_tip_rate (to producer)
  • Totals across both resources are the sum of their respective components.

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Comparative Analysis

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vs. Traditional EIP-1559 (Ethereum)

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System Dynamics (Conceptual)

EIP-1559 creates a negative feedback loop: when usage exceeds target, basefee increases to temper demand; when usage is below target, basefee decreases to stimulate demand. With two independent markets, this loop operates separately for compute and data, improving fairness and stability.

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Best Practices (Principle-Level)

  • Specify both dimensions: Provide max_fee_per_cycle/cell and tip_per_cycle/cell based on workload characteristics.
  • Estimate usage: Use conservative estimates of Cycles (compute) and Cells (data) based on code paths and payload sizes.
  • Bound tips: Choose tips proportional to urgency; rely on basefee for price discovery, tips for prioritization.
  • Protect with max fees: Set per-resource max fees to cap total spend under volatility.

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Next Steps

Fee Overview

Introduction to dual-metered gas model

Metering Points

Where Cycles and Cells are charged

Worked Example

Complete transaction cost calculation

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Further Reading