Skip to main content

Reward full priority fee to validator

Summary​

Reward 100% of priority fee to validator.

Motivation​

To better align validator incentives, priority fee should change from current 50% burn 50% reward to 100% reward to validator.

Alternatives Considered​

Current 50-50% model is an alternative, which does not fully align with validator's incentive, and encourages side deals.

New Terminology​

None

Detailed Design​

  • When calculate fee for SanitizedMessage, it should separate prioritization_fee from transaction fee.

    • change FeeStructure.calculate_fee()

  • During fee collection, priority fees are accumulated separately from transaction fees;

    • change bank.collector_fees and bank.filter_program_errors_and_collect_fee()

  • When distributing collected fees, the collector_id receives the sum of priority fees. Logic for distributing base transaction fees is unchanged.

    • Change bank.distribute_transaction_fee()

  • No change to fee payer account validation;

  • No change to how much transaction would be paying in total;

Impact​

The implemented proposal aims to enhance incentives for validators to prioritize transactions with higher priority fees, thereby providing more substantial compensation for the validators' efforts in processing higher-paying transactions.

Security Considerations​

None

Drawbacks​

By paying the complete priority fee to their own accounts, leaders can now inflate the reported priority fees in their blocks artificially, incurring minimal costs. Previously, burning a portion of the priority fees deincentivized such behavior. The artificial inflation of fees could lead wallets to overestimate the required priority fee.

Backwards Compatibility​

The implementation of this proposal necessitates the use of a feature gate. Although there will be no alteration to the transaction submitter's payment structure, the software incorporating the proposal will allocate a greater portion of fees to the leader compared to other versions. Consequently, a feature gate is essential to ensure that all validators transition to the new functionality at the epoch boundary, thereby preserving consensus.