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Understanding policies

Understanding Gas and Policies in EVM Blockchains

Overview of Gas on EVM Blockchains

  • Gas Units: A measure of computational effort required to execute transactions or smart contracts on the Ethereum Virtual Machine (EVM).
  • Gas Payment in Native Currency: Each blockchain has its own native currency for gas payments. Examples include:
  • Beam: Paid in Beam.
  • Ethereum: Paid in Ether.
  • Binance Smart Chain: Paid in BNB.
  • Polygon: Paid in MATIC.

Challenge: Users Lacking Native Currency

In scenarios where users need to transact but lack the native currency for gas, Beam 'policies' provide a solution, allowing for payments in a specific ERC20 token.

Types of Policies for Transactions

1. Fixed Charge Policies

  • Fixed Rate: A constant amount of the ERC20 token is charged per transaction, regardless of the gas cost.
  • Economics: This approach prioritizes simplicity and user-friendliness. It's ideal for scenarios where user experience is paramount. However, developers should be aware of the potential for under-recovery of gas costs in times of high network congestion and may need to monitor rates to mitigate this risk.
  • Example: A transfer transaction might be set 1 $Gold, while a minting transaction costs 10 $Gold. They will always cost the same, regardless of the gas price.

2. Dynamic Charge Policies

  • Variable Rate: Charges in ERC20 tokens are calculated based on the current gas cost in wei.

  • Economics: This approach aligns charges with actual transaction costs in wei, offering a fair cost distribution between users and developers. However, the variability in gas prices can lead to a less intuitive user experience, as most users may not fully understand gas price dynamics.

  • Setting Exchange Rate: Developers need to set and adjust an exchange rate between the ERC20 token and wei. This rate determines the amount of ERC20 tokens equivalent to the gas cost in wei for each transaction.

  • Example:

  • If the gas price is 20 wei:

  • Mint transaction: 100 gas units * 20 wei = 2,000 wei (equivalent to 20,000 $Gold at an exchange rate of 10 $Gold per wei).

  • Transfer transaction: 50 gas units * 20 wei = 1,000 wei (equivalent to 10,000 $Gold).

  • If the gas price is 10 gwei:

  • Mint transaction: 100 gas units * 10 wei = 1,000 wei (equivalent to 10,000 $Gold).

  • Transfer transaction: 50 gas units * 10 wei = 500 wei (equivalent to 5,000 $Gold).

  • Note: Example calculations are for illustrative purposes and should be adapted for production use.

Choosing Between Fixed and Dynamic Policies

Developers must weigh the benefits of simplicity (fixed policies) against the need for adaptability to market conditions (dynamic policies).

  • User Considerations: Given that most users lack in-depth knowledge of gas mechanics, the responsibility of managing price volatility and associated risks ideally lies with the developers.
IntroductionManaging policies