The Economics of Smart Contracts
This addresses inefficiencies in Ethereum's economic model for developers and users, but it is incremental as it refines an existing cost-model rather than introducing a new paradigm.
The paper tackles the problem of disproportionate costs in executing Ethereum smart contracts, showing that the gap between actual and computational costs is widening due to a wrongly modeled gas cost-model for the SLOAD instruction, which increases with blockchain length, and proposes a new model incorporating block-height to eliminate irregularities.
Ethereum is a distributed blockchain that can execute smart contracts, which inter-communicate and perform transactions automatically. The execution of smart contracts is paid in the form of gas, which is a monetary unit used in the Ethereum blockchain. The Ethereum Virtual Machine (EVM) provides the metering capability for smart contract execution. Instruction costs vary depending on the instruction type and the approximate computational resources required to execute the instruction on the network. The cost of gas is adjusted using transaction fees to ensure adequate payment of the network. In this work, we highlight the "real" economics of smart contracts. We show that the actual costs of executing smart contracts are disproportionate to the computational costs and that this gap is continuously widening. We show that the gas cost-model of the underlying EVM instruction-set is wrongly modeled. Specifically, the computational cost for the SLOAD instruction increases with the length of the blockchain. Our proposed performance model estimates gas usage and execution time of a smart contract at a given block-height. The new gas-cost model incorporates the block-height to eliminate irregularities in the Ethereum gas calculations. Our findings are based on extensive experiments over the entire history of the EVM blockchain.