1. GasToken: A Journey Through Blockchain Resource Arbitrage
Florian Tramèr
Stanford University
Yet another token? Even academics going down this road.
Bear with me. No product, no ICO. The whole idea is that the token encodes a resource that cannot be backed directly by ether.
MIT Bitcoin Expo
18 March 2018

2. Imagine if…
Monday: It’s $4 for the cappuccino… and the transaction fee is $0.10.
Friday: It’s $4 for the cappuccino… and the transaction fee is $6.25.
18 March 2018
MIT Bitcoin Expo

3. Transaction fees / Ethereum gas prices are super volatile
18 March 2018
MIT Bitcoin Expo

4. Same in Bitcoin… source: bitinfocharts.com 18 March 2018
MIT Bitcoin Expo

5. How do ordinary businesses handle volatility?
Stock up when prices are low!
Or buy financial instruments…
How do you “speculate on” or stockpile transaction fees?
You can’t stockpile transaction fees?
In some twisted way, you can!
18 March 2018
MIT Bitcoin Expo

6. GasToken: Stockpiling and trading Ethereum gas
Phil Daian, Lorenz Breidenbach, FT + Ari Juels
18 March 2018
MIT Bitcoin Expo

7. Ethereum Gas 1 GWei = 109 Wei 1 Ether = 1018 Wei User Miner(s)
MyContract
func(x):
a = x + 1
b = hash(a)
Mem[0] = b
3 gas
30 gas
20000 gas
20033 gas
I want to run func(1)
How Much?
User
Miner(s)
1 GWei per gas? ( eth)
Meh…
18 March 2018
MIT Bitcoin Expo

8. Ethereum Gas 1 GWei = 109 Wei 1 Ether = 1018 Wei User Miner(s)
MyContract
func(x):
a = x + 1
b = hash(a)
Mem[0] = b
3 gas
30 gas
20000 gas
20033 gas
Gas cost of contract is FIXED (always gas). But price of one unit of gas in ether is highly volatile
I want to run func(1)
How Much?
User
Miner(s)
10 GWei per gas? ( eth)
OK!
18 March 2018
MIT Bitcoin Expo

9. GasToken in a nutshell
To encourage state cleanup, Ethereum offers a gas refund for:
Released contract storage
Destroyed contracts
Write to state when gas price is low
Trade state slots as an ERC20 token
Release state when gas price is high
Refund pays up to half of transaction fee
Not a new idea: goes back at least to 2015, Vitalik Bueterin speculated that rational miners could use this mechanism to fill up blocks
More generally, it was clear that clients could use this in isolation (I stock storage for my future transactions).
We show that this can easily be transformed into an open market, where stockers and consumers can be distinct
18 March 2018
MIT Bitcoin Expo

10. An example Store 10 words Breed kitties Regular Total Gas: 200,0001
GWei
Store 10 words
Total Gas: 200,000
Price: $0.20
Regular 4
GWei
Breed kitties
Total Gas: 250,000
Price: $9
18 March 2018
MIT Bitcoin Expo

11. An example Store 10 words Free 10 words & breed kitties refund Regular1
GWei
Store 10 words
Total Gas: 200,000
Price: $0.20
Free 10 words &
breed kitties
Regular 4
GWei
refund
Total Gas: 250,000 – 100,000
Price: $9 $5
18 March 2018
MIT Bitcoin Expo

12. Nifty details Two variants of GasToken:
GST1: uses storage, SSTORE(1), SSTORE(0)
GST2: uses contracts, CREATE, SELFDESTRUCT
GST2 more complex but also more efficient
SSTORE: 20k to stock, for 10k refund (50%)
CREATE: 32k to stock, for ~17k refund (53%)
Refund is interesting when gas volatility is >2x
18 March 2018
MIT Bitcoin Expo

13. Nifty details Two variants of GasToken:
GST1: uses storage, SSTORE(1), SSTORE(0)
GST2: uses contracts, CREATE, SELFDESTRUCT
Refund is interesting when gas volatility is >2x
GST2 more complex but also more efficient
SSTORE: 20,000 to stock, for 10,000 refund
CREATE: 32,000 to stock, for ~17,000 refund
18 March 2018
MIT Bitcoin Expo

14. FAQ Who “pays” for the refund?
Technically, the miner by only being paid for half the transaction cost
Why wouldn’t miners blacklist GasToken then?
Ethereum is naturally “censorship resistant”
GasToken can increase transaction demand when gas prices are low
Is GST1/2 an investment vehicle / security / financial product?
No! We make absolutely no promises of any returns, profit…GasToken is not based on any currency, asset, or other financial product… We encourage users to expect zero further effort from its developers… it is likely that the developers of GasToken will advocate for changes to the network that render GasToken unusable. 
Looking forward: very interesting insights into incentives:
do people use gastoken? If not, why not?
if it is used, how closely does the token’s price reflect the price of the gas that it holds. Will gas prices stabilize?
do miners try to blacklist it?
18 March 2018
MIT Bitcoin Expo

15. FAQ Who “pays” for the refund?
Technically, the miner by only being paid for half the transaction cost
Why wouldn’t miners blacklist GasToken then?
Ethereum is naturally “censorship resistant”
GasToken can increase transaction demand when gas prices are low
Is GST1/2 an investment vehicle / security / financial product?
No! We make absolutely no promises of any returns, profit…GasToken is not based on any currency, asset, or other financial product… We encourage users to expect zero further effort from its developers… it is likely that the developers of GasToken will advocate for changes to the network that render GasToken unusable. 
So many 0s…
40 bits
18 March 2018
MIT Bitcoin Expo

16. The issue with storage pricing
Blockchain state is (a priori) permanent
Smart contract storage, UTXO set, etc.
One time transaction fee ⇒ recurring & indefinite costs to network
Writing to state must be expensive to deter DOS attacks
Yet incentivize users to clean up…
E.g., many transactions in Bitcoin’s UTXO have no positive incentive to be spent
Why 20k gas for SSTORE?
How do we fix this “bug”
18 March 2018
MIT Bitcoin Expo

17. Storage Rent EIP 35/87: Charge “rent” for contract storage
If rent unpaid, storage is removed from chain
Refund scheme could be removed entirely
Great idea but tricky execution
Developers must guard against storage loss
Entire contracts could disappear if unpaid
Doesn’t work for UTXO set…
18 March 2018
MIT Bitcoin Expo

18. The big picture: Cryptocommodities
Blockchain transactions require a number of “raw” resources or commodities
Memory: block space, UTXO set, etc.
Computation: e.g., gas in Ethereum
How do we accurately price and freely trade these commodities (and their derivatives)?
18 March 2018
MIT Bitcoin Expo

19. Project Chicago: beyond GasToken
More efficient transaction-fee derivatives
Bob: I’ll pay Alice’s transaction on April 1st
Avg. gas price is 5 GWei
Alice: Run my transaction
Transfer funds from Bob to Alice
Other cryptocommodities?
In-protocol futures
Could stable & efficient cryptocommodity markets be supported at the consensus level?
How much escrow do we need?
18 March 2018
MIT Bitcoin Expo

20. Learn More Thanks! https://gastoken.io https://projectchicago.io
18 March 2018
MIT Bitcoin Expo