Skip to content

Commit ddd692f

Browse files
authored
feat(docs): replace gas fee refund formulas with LaTeX (#564)
Replace image-based formulas for the Flat Tax Rule and Identity Constraint with LaTeX equations in the gas fee refunds documentation. This change improves accessibility and allows for easier maintenance of the mathematical content. - Remove image placeholders for formulas - Add LaTeX equations for the Flat Tax Rule - Add LaTeX equations and explanation for the Identity Constraint
1 parent 4326f6d commit ddd692f

File tree

1 file changed

+29
-11
lines changed

1 file changed

+29
-11
lines changed

docs/flashbots-auction/advanced/gas-fee-refunds.md

Lines changed: 29 additions & 11 deletions
Original file line numberDiff line numberDiff line change
@@ -73,27 +73,45 @@ Bundles sent by the same signer will be treated as non-competitive.
7373

7474
### The Flat Tax Rule
7575

76-
<div className="med caption-img">
77-
78-
![Flat tax rule](/img/flat-tax-rule.png)
79-
80-
Definition of the flat tax rule
81-
82-
</div>
76+
- **$B(T)$** is the most profitable block produced from bundles in $T$.
77+
- **$v(T)$** is the value of $B(T)$.
78+
- **$b_i(T)$** is the payment of all bundles sent by identity $i$ if block $B(T)$ is realized.
79+
- **$\mu_i(T) = \min\{b_i(T), v(T) - v(T \setminus \{i\})\}$** is the marginal contribution of all bundles sent by identity $i$ if $B(T)$ is realized. We bound the marginal contribution so that the net payment can't be negative.
80+
- **$c$** is the amount the builder pays to the proposer to win the block.
81+
82+
$$
83+
\phi_i(T, c) = \frac{\mu_i(T)}{\sum_j \mu_j(T)} \min\{v(B(T)) - c, \sum_j \mu_j(T)\}
84+
$$
85+
86+
So the net payment per identity (assuming it's included) is $p_i(T) = b_i(B(T)) - \phi_i(T, c)$.
8387

8488
Notice that if the block generates enough value after paying the proposer, everyone should be refunded their contribution, meaning everyone pays the minimum they need to pay to beat competition.
8589

8690
### Identity constraint
8791

8892
To avoid the rule being gamed by submitting bundles from multiple identities, we impose an additional constraint that no set of identities can receive in total more refunds than they contribute to the block.
8993

90-
<div className="med caption-img">
94+
For each set of identities $I$ we define
95+
96+
$$
97+
\mu_I(T) = \min\{\sum_{i\in I} b_i(T), v(T) - v(T \setminus I)\},
98+
$$
99+
100+
to be the joint marginal contribution of the identities in $I$ to the block. Then we choose rebates that are minimally different from the flat-tax rule subject to the constraint that they don't rebate a set of bundles more in total than its joint marginal contribution. This means the vector of rebates $\psi(T, c)$ solves
101+
102+
$$
103+
\min_{r\in\mathbb{R}^n_+} \sum_i (r_i - \phi_i(T, c))^2
104+
$$
91105

92-
![Identity constraint](/img/identity-constraint.png)
106+
$$
107+
\text{subject to} \sum_{i\in I} r_i \leq \mu_I(T) \text{ for each } I \subseteq B(T),
108+
$$
93109

94-
Definition of the identity constraint
110+
$$
111+
\sum_i r_i \leq v(T) - c
112+
$$
95113

96-
</div>
114+
where $\phi(T, c)$ are the orginal flat-tax rebates as defined above.
97115

98116
## Who receives refunds
99117

0 commit comments

Comments
 (0)