What is economic abstraction?
“Economic abstraction”, in the context of blockchain architecture, refers to the idea that a blockchain architecture can be modified to remove the existence of a single native blockchain token (or “coin”). Rather than the protocol requiring use of a particular token, the protocol would allow the use of any one of a potentially unbounded number of tokens. ^1
In order to use the BTS DEX, users pay network fees. This is one of the value propositions for holding BTS long term - you will be able to use the BTS DEX so long as you retain them. It is also a loose analogy to Gas (gwei) on the Ethereum Virtual Machine. This article "The Collapse of ETH is inevitable" ^2 has caused a lot of controversy in that community.
I would like to open up a discussion for how we should handle this on BitShares. At the moment, the network allows for economic abstraction with collateralized assets (bitUSD/bitCNY) and UIAs via the fee pool. I think it's good to give users the flexibility to pay network fees with alternatives to BTS. I also recognize the great effects that result from default settings.
I submit that by default network fees should be denominated in bitassets (bitUSD/bitCNY) vs the core token: BTS. This will provide a de facto demand for bitassets (and indirectly BTS) as well as make future fee changes more effective (and hopefully less necessary). Of course, if a user does not have bitassets in their account then paying the fee in BTS should still be allowed. In the past (and likely continuing in the future) network fee changes were demanded by holders as the price of BTS itself rapidly fluctuated, transaction fees could range from 0.004 USD to 0.02 USD within a short period of time.
Since the idea of the network fee is to offer a flat rate for transactions (vs. the marginal (%) rate of gateway and OMO assets) we can flatten the network fee even more by denominating the fee in fiat terms (bitUSD/bitCNY). This may also make things simpler to understand for new users.
Ultimately I believe economic abstraction via bitassets is clearly a good thing for BitShares. We should be more cautious about UIAs but so long as the fee pool is maintained I don't see great cause for alarm on that front.
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1 -
https://medium.com/@Vlad_Zamfir/against-economic-abstraction-e27f4cbba5a72 -
https://techcrunch.com/2018/09/02/the-collapse-of-eth-is-inevitable/