On the Welfare of EIP-1559 with Patient Bidders

The ``EIP-1599 algorithm'' is used by the Ethereum blockchain to assemble transactions into blocks. While prior work has studied it under the assumption that bidders are ``impatient'', we analyze it under the assumption that bidders are ``patient'', which better corresponds to the fact that unscheduled transactions remain in the mempool and can be scheduled at a later time. We show that with ``patient'' bidders, this algorithm produces schedules of near-optimal welfare, provided it is given a mild resource augmentation (that does not increase with the time horizon). We prove some generalizations of the basic theorem, establish lower bounds that rule out several candidate improvements and extensions, and propose several questions for future work.