Design incentive-aware mechanisms with welfare guarantees for multi-dimensional fees

Develop mechanisms for the online block packing problem that explicitly account for user incentives, including analyzing a multi-dimensional analogue of Ethereum’s EIP-1559 that achieves provable welfare guarantees with modest slackness and extension, under reasonable strategic behavior assumptions.

Background

The algorithms in the paper are purely algorithmic and do not model strategic behavior. For blockchain deployment, mechanisms must be incentive-compatible or at least robust to strategic bidding.

The authors suggest analyzing a multi-dimensional counterpart to EIP-1559 with welfare guarantees akin to known single-resource results, noting that existing regret analyses for impatient bidders do not imply such welfare bounds.

References

Our algorithms ignore strategic behavior and make no attempt to resemble existing mechanisms like EIP-1559. One challenge would be to make reasonable strategic modeling assumptions and then design mechanisms that take incentives into account. A more specific challenge would be an analysis of a multi-dimensional analogue of EIP-1559 that delivers provable welfare with modest slackness and extension, echoing the single-resource result of. Existing regret analyses for impatient bidders do not yet imply such welfare guarantees. All three challenges remain open even in the fully patient regime (\rho_i=0).

— Online Block Packing (2507.12357 - Eliezer et al., 16 Jul 2025) in Subsubsection “Incentive-aware mechanisms,” Open Problems and Future Work