Economic Model and Fee Structure
IBVM uses BTC as its native currency for both transaction settlement and gas fees.
Gas Pricing Model
The gas price in IBVM is denominated in satoshis per gas unit:
Users specify a gas price in their transactions
Sequencers prioritize transactions with higher gas prices
A base fee mechanism adjusts the minimum gas price based on network demand
The minimum gas price is calculated as: $BaseGasPriceₙ = BaseGasPriceₙ₋₁ × (1 + 0.125 × (BlockGasUsedₙ₋₁/TargetBlockGasLimit - 0.5))$
Where:
$BaseGasPriceₙ$ is the base gas price for block $n$
$BlockGasUsedₙ₋₁$ is the gas used in block $n-1$
$TargetBlockGasLimit$ is the target gas limit per block
Fee Distribution
Transaction fees are distributed among several participants:
Sequencers: 60% of the total fees
Rewards sequencers for transaction processing and state updates
Provers: 30% of the total fees
Compensates for computational resources used in generating ZK proofs
Bitcoin Miners: 10% of the total fees
Paid for including IBVM commitments in Bitcoin blocks
The fee for each participant is calculated as: $Fee_{participant} = \sum_{tx \in batch} (tx.gasUsed \times tx.gasPrice) \times Rate_{participant}$
Economic Security
The economic security of IBVM is derived from:
Sequencer Stake: Minimum stake requirement ensures economic alignment $Stake_{min} = max(S_{base}, \alpha \times AvgBatchValue)$ Where:
$S_{base}$ is the base stake requirement
$\alpha$ is a security factor (typically 2)
$AvgBatchValue$ is the average economic value of a batch
Challenge Bonds: Challengers must stake BTC to submit fraud proofs $Bond_{challenge} = \beta \times RewardIfCorrect$ Where:
$\beta$ is a factor preventing spam (typically 0.1)
$RewardIfCorrect$ is the reward for a successful challenge
Fee Burning: A portion of fees is burned to create deflationary pressure $Burn_{amount} = \gamma \times TotalFees$ Where:
$\gamma$ is the burn rate (typically 0.05)
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