LP-3667: Dynamic EVM Gas Limit Updates

Abstract

This proposal implements dynamic gas limit and price discovery mechanisms for the EVM to improve network efficiency and fee predictability.

Motivation

The current static gas limits and fee mechanisms can lead to:

Network congestion during peak usage
Unpredictable transaction costs
Inefficient resource utilization
Poor user experience during high-demand periods

Specification

Dynamic Gas Limits

The implementation provides adaptive gas limits based on:

Network utilization metrics
Block fill rates
Transaction queue depth
Historical demand patterns

Price Discovery

Implements improved fee estimation through:

Real-time demand analysis
Predictive modeling for fee trends
Market-based pricing mechanisms
Priority fee optimization

Implementation Details

Located in: vms/evm/lp176/

Key components:

State: Manages dynamic fee state
Reader: Provides fee calculation interfaces
Gas target and capacity management
Excess gas tracking for EIP-1559 compatibility

Rationale

Design Decisions

1. EIP-1559 Compatibility: Building on the proven EIP-1559 mechanism ensures compatibility with existing Ethereum tooling and user expectations for predictable fee estimation.

2. Dynamic Gas Limit: Adaptive gas limits allow the network to handle varying load conditions without manual intervention, improving throughput during high demand.

3. Exponential Adjustment: The exponential adjustment curve (from LP-176) provides smooth transitions while preventing rapid oscillations that could destabilize fee markets.

4. Per-Chain Configuration: Each chain (C-Chain, chains) can configure its own gas parameters based on specific performance requirements and use cases.

Alternatives Considered

Fixed gas price: Rejected as it cannot adapt to network conditions
Linear adjustment: Rejected due to potential for manipulation and slow response to congestion
Off-chain fee oracles: Rejected as they introduce trust assumptions and latency

Backwards Compatibility

Fully backwards compatible with existing EVM transactions while providing enhanced fee mechanisms for new transactions.

Security Considerations

Prevents fee manipulation attacks
Ensures deterministic fee calculations
Maintains consensus on fee state across validators

Test Cases

Comprehensive test suite in vms/evm/lp176/lp176_test.go covering:

Dynamic target calculations
Fee estimation accuracy
State transitions
Edge cases and bounds checking

Implementation

Node: github.com/luxfi/node v1.17.1+
Consensus: Integrated with Lux consensus v1.18.1
Activation: Post-Etna upgrade

References

EIP-1559: Fee market change for ETH 1.0 chain
Original ACP-176 (migrated to LP-176)
Lux fee mechanism research

Dynamic EVM Gas Limit Updates