►
Description
Here, Illia discusses Economics in a sharded Blockchain.
~~~ABOUT Lunch and Learns~~~
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A
Hey
everyone,
this
Ilya
from
near
I'm
gonna
talk
about
economics
in
our
new
episode
of
lunch
series.
So
let's
start
kind
of
to
compare
how
the
economics
in
sharted
blockchains
differs
from
economics
and
kind
of
regular
blockchain
with
one
one
chain.
So
right
now,
if
you
think
of
it,
when
we
produce
a
block
right,
there's
a
limited
capacity,
how
much
you
can
have
of
transactions
and
as
kind
of
blocks
and
that
field
more
naturally
you're
starting
to
compete
for
resources.
A
The
economics
of
this
is
very
different
today,
we'll
talk
about
night
chain
design
and
specifically
a
few
of
the
things
we're
doing
to
make
sure
that
economics
is
both
straightforward
for
developers
and
balances
out
so
kind
of
one
of
the
important
things
is
that,
if
you
put,
if
developers
can
put
their
applications
into
a
specific
shard
right,
so
you
have
shard,
1
or
2,
they
can
decide.
Oh
I
want
to
be
in
chart
2.
Let's
say
it's
less
used.
I
can
see.
There's
a
you
know.
A
A
So
if
I
want
to
work
with
the
sales
application,
let's
just
say
maker
decides
to
live
in
char
to
my
application,
wants
to
interact
with
maker
I
want
to
use
die
in
my
application.
I
will
want
to
live
in
the
same
shark
and
obviously,
let's
say
this
was
compound.
Somebody
else
want
to
kind
of
plug
in
there
as
well.
So,
as
this
starts
to
happen,
this
shard
will
actually
start
fill
up
as
well
and
at
some
point
the
prices
here
will
start
going
up
as
well.
A
This
creates
a
lot
of
kind
of
pervasive
incentives
on
the
application
developers
or
as
well
as
in
general,
in
the
whole
system.
Now
the
other
kind
of
consideration
we
should
keep
in
mind
is
that
that
cross
chain
communication
is
actually
depending
on
design,
may
take
some
time.
So
one
of
the
things
we're
doing
in
Thein
shade
is
making
sure
that
the
kind
of
receipts
get
rerouted
every
block,
and
you
can
check
out
the
previous
episode
to
learn
how
exactly
this
is
done.
A
To
kind
of
compare
this
in
some
of
the
other
approaches,
if
you
are
using,
for
example,
a
beacon
chain
that
might
be
producing
blocks
less
frequently
or
actually
just
has
this
cross-linking
happening
less
less
frequently.
That
means
that
the
price
of
communications
actually
might
be
more
expensive
and
as
soon
as
you
have
more
expensive
price
of
communication,
this
means
that,
if
my
app
lives
on
this
chain,
the
price
of
even
using
die,
it
starts
to
become
higher,
because
it's
not
just
that
I
need
to
create
a
transaction
here.
A
So
the
idea
is
that
as
a
developer,
you
just
deploy
an
application
and
it
can
and
it
gets
assigned
to
one
of
the
shards
depending
on
the
current
layout
of
the
network.
So
to
do
that,
one
of
the
things
we're
doing
is
called
dynamic
charting.
This
is
the
idea
that,
if
you
have
all
your
contracts,
let
me
draw
this
differently.
If
you
have
all
your
contracts,
kind
of
laid
out
on
some
space,
for
example,
this
is
just
a
hash
of
account.
A
A
This
pretty
much
provides
us
with
idea
that,
even
if
the
two
contracts
are
live
in
the
same
shard
right
now,
because
of
you
know
they
end
up
in
the
same
shard,
we
still
actually
create
cross
shard
receipts
for
the
next
block
to
execute
here,
which
means
that
as
a
developer,
you
really
don't
have
any
kind
of
difference.
If
your
app
lives
in
one
shard
or
in
like
in
different
shards
of
the
same
shard,
with
what
you
want
to
operate
with.
So
it's
always
happens.
The
synchronously.
A
This
also
has
a
huge
benefit
of
actually
being
able
to
execute
this
processing
in
parallel,
because
you
now
and
don't
have
any
synchronization
within
the
block
and
there's
like
lots
of
benefits
around
that
now.
What
this
means
is
is
that
when
the
blocks
are
produced
right,
when
you
only
produce
in
block
in
proof
of
stake,
what
happens
is
we
don't
actually
execute
it?
A
Because
you
only
need
to
assign
the
transactions
that
will
be
in
a
block
and
publish
it
and
start
accepting
approvals,
which
means
a
kind
of
cost
for
a
block
producer
at
the
moment
is
actually
not
proportional
to
the
transaction
weight
of
transaction
gas.
But
it's
just
kind
of
proportional
to
the
size
and.
A
So
this
is
valid
as
that
are
validating
kind
of
each
validator
validate
subsets
of
shards,
but
all
together,
they
validate
the
whole
the
whole
blockchain
and
provide
security
for
the
whole
blockchain,
and
you
cannot
like
individually
assigned
to
them
all
this
guy
validated
this
subset
of
shards,
and
this
is
amount
of
gas,
was
executed,
etc.
So,
now
what
this
means
is
you
actually
rewards
the
whole
system
right
instead
of
splitting
off
this
block
producer,
produces
this
block
and
did
this
much
work
instead,
you're
saying
well,
the
whole
system
did
this
much
work.
A
This
validators
provides
security
for
all
this.
For
all
this
work
and
by
work,
I
mean
actually
executing
transactions
and
processing
state.
So
now
we're
kind
of
going
away
from
this
idea
that
each
blog
producer
competing
for
transactions.
Instead,
the
kind
of
cost
of
executing
is
been
split
between
all
of
the
participants
in
the
system
evenly.
So
that's
or
like
proportionate
to
how
much
actual
participation
they've
done
during
this
period.
A
Well,
the
punishment
I
mean
by
like
what
is
the
ways
to
commit.
This
is
so
improved
stake
right.
You
actually
have
assignment
for
each
slot,
who
needs
to
do
which
work
right,
so
the
only
way
to
compete
is
actually
to
skip
so
like
let's
say
somebody
builds
a
blockchain
and
I
want
to
compete
right
by
getting
all
the
transactions
to
myself.
So
the
only
way
for
me
to
compete
is
actually
to
skip
all
those
guys
and
take
all
the
transactions
from
them.
A
To
my
to
my
block,
that's
really
the
way
to
compete
now,
because
the
way
the
reward
is
done,
it's
actually
smeared
among
all
the
validators.
So
in
reality
that's
not
really
helping
you
in
any
way.
So
the
only
way
is
like.
If
you
are
the
only
person
in
your
chain
and
you
collect
all
the
transactions,
that's
the
only
way
to
do
it.
But
then,
obviously
this
chain
has
way
more
validators
and
will
be
preferred
so
you'll
get
nothing.
A
I'm
talking
about
the
whole
system
so
because,
like
because,
from
our
perspective,
right
transaction
routing
happens
kind
of
within
one
block
and
we
can
dynamically
rashard
the
way
I
model.
This
is
that
it's
one
chain
like
because
really
within
shards,
like
we're
trying
to
remove
all
kind
of
prop
like
sharding
details.
Right
then,
as
of
like
as
a
valid
as
well
as
a
developer,
you
don't
need
to
think
of
sharding
people.
B
A
Like
validators
cannot
compete
for
anything
anyways
they
just
about,
like
they
literally
receiving
block
and
executing
it,
and
just
making
sure
that
you
know
all
the
miracle
proofs
are
correct
and
if
they
not
correctly
slashing
and
that's
separate
topic,
but
that's
idea
is
that
you
actually
yeah
pretty
much
removes
the
incentive
for
block
producers
to
do
a
lot
of
things
that
in
proof
of
work,
for
example.
This
is
actually
a
very
bad
idea
and
then
you
start
accumulating
more
weight
on
top
of
this
by
trying
to
skip
all
right.
A
A
So
the
interesting
part
here
is
like
how
do
we
get
block
producers
and
Hill
validator
selected
right
so
yeah
to
just
finish
on
the
reward
part
right
so
now,
given
we
have
kind
of
dynamic
number
and-
and
one
of
the
ideas
here
is
that
actually
you
can
grow
number
of
sharks.
So
let's
say
is
the
amount
of
gas
that
has
been
used
within
las
block
is
actually
went
up
over.
You
know
previous
period
of
time,
what
you
can
do.
You
can
actually
allocate
new
shards
and
pretty
much.
We
split
it
dynamically
xplit.
A
Now
what
this
means
is
that
you're
actually
never
hitting
the
cap
of
those
kind
of
capacity
which
means
like,
if
you
run
just
the
regular
auctions,
like
your
price,
will
never
go
up
except
within,
let's
just
say,
like
there's
a
neat
ebooks
right
half
a
day,
so
it
was
in
an
e-book.
You
can
actually
have
like
a
gross
happening,
and
then
you
reach
shard,
and
it's
kind
of
like
will
reset
again
right.
So
that's
idea
like
the
total
grows
have
like
happens
like
this,
but
it
was
in
each
shard.
A
It
kind
of
starts
from
just
from
zero.
Every
time.
You're
a
shard
so
like
one
of
the
main
concerns
is,
for
example,
sedum.
Is
that
given
the
auction?
It's
very
choppy
right
like
like
this
blog?
There
is
a
lot
of
interest
and
you
know
the
price
went
up
and
the
next
block
there's
nothing
happening
and
it
ended
up
being
gas,
cheap
gas
being
cheaper.
So
actually,
this
idea
from
italic
is
to
pretty
much
have
a
formula
which
is
predictably
changes
gas
over
time
and
it
depends
on.
A
How
much
gas
was
used
divided
by
gas
limit,
minus
half
multiplied
by
some
alpha?
So
alpha
is
like
how
much
you
want
to
change
each
block
so
then,
with
Xin
was
in
an
epoch
right.
You
have
this
idea
that,
like
price,
will
slowly
kind
of
increase,
but
in
in
predictable
way,
so
you
can
actually
like
look
at
the
block
and
it's
even
if
you
assume
that
it
next
block
will
be
half
full,
which
also
does
not
apply
to
you.
But,
like
let's
say
you
know,
your
transaction
gets
included
only
in
a
few
blocks.
B
A
That's
a
good
question.
So
if
you
have
gas
prices
in
its
shard,
this
actually
creates
a
huge
problem
for
developers,
because,
let's
say
my
contract
wants
to
call
contract
to
another
shard,
this
will
call
some
other
thing
will
come
back
right.
Actually
paying
for
this
process
fluid
become
extremely
hard
because
you
don't
actually
know
by
the
time
you
get
there.
A
What's
the
price
going
to
be
so,
instead,
we
suggest
to
in
a
way
a
little
bit
miss
price
the
gas,
because
obviously
different
shards
may
have
different
like
gas
price
because
of
the
usage
at
the
moment,
but
instead
make
it
simpler
where,
as
the
transaction
comes
in,
it
buys
it
like.
The
price
is
the
same
across
all
shards
that
it
buys
it
this
gas
for
the
food
processing
across
all
shards
and
then
gets
routed,
and
then
you
just
get
a
refund
at
the
end.
A
It's
nothing
for
something
left,
so
it
obviously
this
is
not
like,
like
there
can
be
a
shard.
That's
like
fully!
You
know
fully
used
right
now,
but
this
is
only
kind
of
mispricing
within
this
one
epoch
period
of
time.
So,
as
a
3
shards,
you
kind
of
rebalance
everything
again
and
it
can
process
it
properly.
A
Yeah
I
mean
like
I,
don't
think
like.
As
far
as
we
know
like
there
is
no
other
model
has
been
published.
That,
like
actually
clearly
explains.
How
would
you,
how
would
you
charge
in
multi
chain,
environment,
and
it's
unclear
that
any
like
as
a
developer,
you
will
be
able
to
properly
price
it
because,
like
properly
models
is
pricing
unless,
like
prices
are
kind
of
don't
exist
in
the
first
place?
That's
that's.
The
only
other
option
is
like
no.
A
A
There's
also
like
a
lot
of
interesting
Possible's
to
attack
right
now,
so
the
Sharks
producers
can
try
to
withhold
transactions
to
pretty
much
bump
up
the
price
by
you
know,
waiting
out
until
they
collect,
maybe
like
hundreds
of
thousand
block
blocks
of
worth
of
transactions
and
then
like
wrong.
Is
him
out
to
push
the
price
up
now?
A
One
of
the
other
thing
is
in
this
system.
You
may
end
up
in
a
state
where
the
gas
price
actually
just
keeps
going
down
right
until
it
hits
like
whatever
you
numeric
ten
a
numeric
spaces.
So
here
we
still
add
a
min
fee
or
min
price,
and
this
is
just
like
both
to
prevent
like
in
Americas,
but
also
at
the
end.
Valdez
actually
have
some
costs
associated
to
block
production,
even
though
they
don't
actually
execute
it
at
a
time,
but
there
is
a
kind
of
production.
A
So
if
the
price
goes
below
the
block
production
cost,
they
will
kind
of
stop,
except
in
transactions
period,
because
they
can
just
produce
empty
blocks
and
receive
the
rewards,
and
this
is
like
pretty
much
targeted
to
prevent
that.
Obviously,
this
is
also
mispricing
it
in
some
ways,
but
at
this
point
this
is
kind
of
a
best
way
to
to
model
this.
B
A
B
A
B
A
Why
this
is
actually
smeared
across
all
sharks,
so
gas
use
gas
limiters,
aggregation
of
of
gas
used
across
all
sharks,
but
exactly
I
mean
just.
This
is
more
like
a
stopper
in
case,
let's
just
say,
nobody
used
blockchain
for
a
period
of
time.
You
know,
as
we
launch
like,
hopefully,
we'll
have
a
lot
of
usage,
but
it
makes
sense
to
have
some
you
know
mechanics
to
prevent
it.
A
People
now
can
prefer
to
instead
of
building
on
the
longest
chain,
actually
steal
transactions
from
the
longest
chain
or
split
transactions
into
into
once
that
they
include
and
wants
it.
They
will
give
to
an
x-block
producer
right.
So
there's
a
lot
of
interesting
research
on
that,
like
on
Bitcoin
issues
with
this
now
we
kind
of
sidestepping
all
that,
and
what
this
allows
to
do
is
to
actually
have
a
inflation
that
incentivize
directly
this
right,
so
it
sent
devices.
A
So,
given
reward
and
giving
let's
say,
gas
used
we're
actually
incentivizing
people
to
produce
blocks.
Let's
just
say
at
the
incentive
like
target
incentive,
is
inflation
at
5%
or
like
5%
of
coinbase
per
year
as
gas
getting
used
more
right.
The
idea
is
that
your
inflation
actually
gets
lower
and
then,
as
we
hit
5%
from
there,
it
actually
can
keep
going
now.
Obviously,
this
is
like
actually
a
lot
of
gas
use.
So
the
idea
is
that
we
target
like
a
really
large
network
with
a
lot
of
usage.
A
But
the
very
interesting
point
here
is
that,
like,
as
we
reduce
like
the
proportion
of
the
kind
of
inflation,
is
very
much
dependent
on
how
much
usage
the
network
gets.
So
the
more
network
use
the
better
start
values
as
becomes,
and
it
pretty
much
kind
of
contracts.
A
lot
of
this
negative
elements
of
the
current
proof-of-work
systems.
B
A
So
add
at
this
break
point
which
is
I
I,
don't
remember
exact
number,
but
it's
it
is
a
fair
bit
of
transactions
per
second
well,
it's
like
a
gas
per
second
really
actually
yeah
pretty
much
inflation
disappears
and
this
becomes
fully
just
sponsored
by
transactions.
But
if
you
know
people
stopped
transacting,
then
it
kicks
in
again.
A
So
it's
the
idea
that
they're
actually
balancing
these
two
things
in
a
very
direct
way,
instead
of
saying
that
hey
in
2020,
whatever
the
the
there'll
be
no
inflation
figure
it
out
so,
and
we
think
this
is
actually
a
very
interesting
model
to
kind
of
target.
Sounds
of
properties
that
people
really
want
from
blockchain.
This
is
it
for
episode,
number
2
and
we
will
tune
more
tune
in
more
for
to
learn
more
about
other
components.