Many established blockchain protocols are programmed to transition from a dual-incentive model of block rewards and transaction fees to one sustained exclusively by fees. This paradigm shift, which we term the "Great Fee Migration", introduces high revenue volatility for miners, which undermines the network's security budget and creates economic incentives for destabilising attacks such as fee sniping. This thesis addresses this critical challenge by evaluating blockchain performance under fee-only conditions, with a particular focus on transaction fee mechanism design. We propose and evaluate a novel mechanism, the Reserve Pool TFM, which recycles surplus fees into a network-shared fund to subsidise miner payouts during periods of low network activity, thereby smoothing revenue over time. To empirically validate this design, we develop the Zero-Block Reward Auction simulator, the first framework designed for comparative TFM analysis under fee-only conditions. Using a dataset of over 12 million real-world Bitcoin transactions, our simulations demonstrate that the Reserve Pool TFM is able to reduce miner payout variance by approximately 75\% compared to traditional mechanisms, and achieves a 97\% block profitability rate, substantially strengthening overall network security. Our thesis is further supported by a game-theoretic study revealing that miner revenue depends on mempool congestion rather than artificial block size constraints, and a case study of a privacy-preserving digital advertising system, BB-FLoC, which confirms the viability of the Reserve Pool TFM in non-financial blockchain applications. Our findings offer a concrete path towards ensuring the long-term economic security and sustainability of future fee-only blockchain systems.
Edvinas Kruminis (Thu,) studied this question.