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Reporting on Fees

Info

As a RaaS or Chain Owner, if you require internal daily reporting on fees, we have an RPC script you can leverage for reporting purposes.

Fee Collection System Overview​

1. Fee Collector Address Types (L1 Focus)​

There are two main L1 fee collector addresses:

  1. L1 Base Fee - Refunds batch poster for parent chain posting costs
  2. L1 Surplus - Collects profit on batch posting fees

Important Distinction:​

  • L1 Base Fee = Cost recovery only (NOT for profit)
  • L1 Surplus = Profit collection
  • Using L1 Base Fee for profit indicates misconfiguration

2. How the System Works (Same Gas Token Scenario)​

Transaction Flow:​

  1. Users send transactions on the child chain
  2. Transactions are packaged into batches
  3. Batch poster sends batches to parent chain (paying parent chain gas)
  4. Batch posting reports are generated containing:
    • Batch size
    • Gas price used

Fee Recovery Mechanism:​

  1. ArbOS consumes batch posting reports
  2. Creates gas price view of parent chain on child chain
  3. Uses this view for pricing future transactions
  4. Implements balancing mechanism to ensure:
    • Amount collected in L1 base fee ≈ Amount spent on batch posting
    • Uses estimates that average out over time

3. Custom Gas Token Scenario (Different tokens on parent/child chains)​

Transaction Flow:​

  1. Users send transactions on the child chain
  2. Transactions are packaged into batches
  3. Batch poster sends batches to parent chain (paying parent chain gas)
  4. Fee token price setter mechanism scales the gas price by the exchange rate
  5. Batch posting reports are generated containing:
    • Batch size
    • Gas price used (scaled by the exchange rate)

Fee Recovery Mechanism:​

Same as the same gas token scenario, but uses the gas price from the batch posting report that was already scaled by the exchange rate.

The Exchange Rate Problem:​

  • Batch poster spends in parent chain gas units
  • Gets refunded in child chain gas units
  • Creates exchange rate risk
  • Should NOT set artificially high exchange rate for profit

4. Monitoring Tool Requirements​

Purpose:​

Detect if operators have misconfigured the L1 base fee mechanism (using it for profit by manipulating exchange rates)

Cost Calculation (Same for All Revenue Methods):​

  • Parent chain tokens spent = gas used × gas price (from batch posting report)
  • Plus percentage for exchange transaction costs

Revenue Calculation Methods:​

Method 1 - Exchange Rate Analysis (Parent Chain Only):​

  • Revenue Calculation:
    • Simulated revenue = gas used × gas price (from batch posting report)
    • Note: This gas price has already been adjusted by the fee token pricer mechanism
    • This represents the child chain tokens that will be collected from users
  • Data Source: Batch posting reports only
  • Process:
    1. Extract gas used and scaled gas price from batch posting report
    2. Calculate simulated revenue in child chain tokens
    3. Compare against actual costs in parent chain tokens (using ideal exchange rate)
  • Advantage: Lightweight - only needs parent chain data

Method 2 - Direct Balance Tracking (Child Chain):​

  • Revenue: Actual amount collected in L1 base fee collector address
  • Data Source: Child chain L1 base fee address balance
  • Process: Track actual collected amounts
  • Advantage: More accurate - uses real collection data

Note: Method 1 and Method 2 should be roughly equivalent over the long term.

Analysis Criteria (Both Must Be Met):​

  1. Volume Threshold
    • Check the total value in batch posting reports
    • Must be above threshold (filters out small chains with low volume)
  2. Cost vs Revenue Deviation
    • Calculate the deviation between revenue and estimated costs
    • Use either Method 1 or Method 2 for revenue
    • Must exceed the deviation threshold

If both criteria are met → indicates misconfiguration

Implementation Details:​

Exchange Rate Sources:​

  • Use third-party sources for "ideal" exchange rates (e.g., CoinGecko, CoinMarketCap, etc.)

Output:​

  • The tool generates a simple report showing exchange rate deviations.
  • If both criteria are met, contact the chain owner to inform them that they need to use a better pricing mechanism
Info

As a RaaS, if you want to dispute the fees, you can contact the Arbitrum Foundation to review your fees.