Transaction fee factors for consideration

Listing the different transaction fee factors that will be considered for each transaction fee approach

The methodology used for this approach comparison is documented separately.

Taxation fairness

• Description - Community members in any ecosystem should be treated fairly in relation to how much fees they pay to help operate and maintain the network when compared to what other people are paying.

• Maximum score - 5, Very important. If a network is unfair to certain community members it could result in an increasing area of conflict within the ecosystem over time. Unfair transaction fees could create an opportunity for competing networks to emerge that adopt fairer fees structures.

• Scoring questions - How fair is this transaction fee approach for different stakeholders in the ecosystem? How does the fee approach impact poorer and wealthier community members?

• Scoring - High fairness is good (Score - 5). Low fairness is bad (Score - 1).

Incentive complexity

• Description - The approach used for transaction fees could influence how people behave and how they use the network due to the incentives that the transaction fee approach might present them.

• Maximum score - 5, Very important. The transaction fee approach could lead to undesirable user behaviours due to the incentives.

• Scoring questions - What behaviours or usage patterns could the transaction fee approach cause? Are the incentives beneficial to community members and for the overall usage of the network? How could users try to exploit the fee approach for their own benefit if they are able to?

• Scoring - Low complexity is good (Score - 5). High complexity is bad (Score - 1).

Network risks

• Description - The transaction fee approach could introduce a number of potential network risk factors that might need to be managed or resolved.

• Maximum score - 5, Very important. A network that is designed to support millions of users needs to be sufficiently robust to handle different usage conditions and suddenly changing market dynamics. A lack of network stability could lead to network failures and reduced trust in the network.

• Scoring questions - How would the network be impacted by different usage patterns and sudden changes? Could the fee approach jeopardise the stability of the network?

• Scoring - Low risk is good (Score - 5). High risk is bad (Score - 1).