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.Note: Content on this page is principle-level. Normative specifications (formulas, constraints) are defined in CIP-3.
EIP-1559 Recap
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
Cowboy’s Dual Basefee System
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
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.
Basefee Properties and Parameters
Parameters (per CIP‑3)
| Parameter | Symbol | Description |
|---|---|---|
| Target Usage | T | Desired per-block utilization (e.g., 50% of limit) |
| Adjustment Speed | α | Controls how quickly basefee reacts (larger = smoother) |
| Max Change | — | Maximum per-block adjustment (clamped) |
| Min Basefee | — | Non-zero floor to prevent zero basefee |
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.
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.
Comparative Analysis
vs. Traditional EIP-1559 (Ethereum)
| Feature | Ethereum (Single) | Cowboy (Dual) |
|---|---|---|
| Resource Types | 1 (gas) | 2 (Cycles + Cells) |
| Basefees | 1 | 2 (independent) |
| Markets | 1 (coupled) | 2 (decoupled) |
| Fairness | Mixed subsidy | Pricing per resource |
| Predictability | Medium | High (resource-specific) |
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.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.
Next Steps
Fee Overview
Introduction to dual-metered gas model
Metering Points
Where Cycles and Cells are charged
Worked Example
Complete transaction cost calculation