Beyond Static Fees: A Cumulative Volume-Based System for Scalable DeFi Payments

2025-07-07

The Problem: Fixed Fees Are Inefficient

Most payment systems, whether centralized (like Stripe or PayPal) or decentralized (like Uniswap or 1inch), rely on static fee structures. These fees are typically fixed percentages or scale linearly with transaction size, regardless of network context or user behavior.

This model fails to account for cumulative usage or time-based distribution. The result is a system that favors volume concentration and penalizes consistent, moderate usage.

In DeFi, this translates into:

  • Congestion during predictable peak hours
  • Disproportionate costs for smaller users
  • Increased MEV exposure
  • Unpredictable user experience

Static fees replicate the inefficiencies of the legacy financial system. They ignore the design space offered by smart contracts and the opportunity to align cost with behavior.

The Solution: Dual-Layer Progressive Fee System

The PaymentProcessor implements a sophisticated dual-layer fee system that operates on two levels:

  1. Core Level: Progressive fees based on contract-wide cumulative volume
  2. Factory Level: Daily volume tracking per user for fine-grained control

This hybrid approach provides both network-wide congestion management and individual user incentives.

Core Layer: Contract-Wide Volume Tracking

The core contract tracks total cumulative volume and adjusts fees automatically:

uint256 public constant VOLUME_THRESHOLD = 100 ether; // Network threshold
uint256 public totalVolume;          // Cumulative volume across all users

function getCurrentPlatformFeeBps() public view returns (uint96) {
    if (isAdvancedMode) {
        return totalVolume >= VOLUME_THRESHOLD ? uint96(700) : uint96(500);
    } else {
        return totalVolume >= VOLUME_THRESHOLD ? uint96(500) : uint96(300);
    }
}

Factory Layer: Per-User Daily Volume

The factory provides granular daily volume tracking per user:

uint256 public constant DAILY_ETH_VOLUME_THRESHOLD = 3 ether;        // ~$9,000 daily volume
uint256 public constant DAILY_USDT_VOLUME_THRESHOLD = 10000 * 10**6; // $10,000 USDT (6 decimals)
uint256 public constant DAILY_USD_VOLUME_THRESHOLD = 10000;          // $10,000 USD reference

struct DailyVolumeData {
    uint128 volumeETH;     // Up to ~340T ETH (sufficient)
    uint32 lastUpdateDay;  // Until year 11,759,901 (sufficient)
    uint96 volumeUSDT;     // Up to ~79B USDT (sufficient)
    // Total: 32 bytes = 1 storage slot
}

This structure is tightly packed to fit in a single storage slot, minimizing gas costs per read/write and reducing SSTORE operations.

Technical Implementation

Stateless Daily Reset

Volume resets are computed deterministically without requiring external triggers:

function getCurrentDay() public view returns (uint32) {
    return uint32(block.timestamp / 86400); // Days since Unix epoch
}

function getDailyVolume(address coreContract, address user, bool isUSDT)
    external view returns (uint256 currentVolume) {
    DailyVolumeData memory volumeData = dailyVolumes[coreContract][user];
    uint32 currentDay = getCurrentDay();

    // Automatic reset if new day
    if (volumeData.lastUpdateDay != currentDay) {
        return 0;
    }

    return isUSDT ? volumeData.volumeUSDT : volumeData.volumeETH;
}

Dynamic Fee Calculation

The system calculates fees based on cumulative daily volume:

function calculateDailyVolumeFee(
    address coreContract,
    address user,
    uint256 transactionAmount,
    bool isUSDT
) external view returns (uint256 feeBps, uint256 newDailyTotal) {
    PaymentProcessorConfig memory config = deployedProcessors[coreContract];
    uint256 currentDailyVolume = this.getDailyVolume(coreContract, user, isUSDT);

    newDailyTotal = currentDailyVolume + transactionAmount;
    uint256 threshold = isUSDT ? DAILY_USDT_VOLUME_THRESHOLD : DAILY_ETH_VOLUME_THRESHOLD;

    if (config.hasExtensions) {
        feeBps = newDailyTotal <= threshold ? 500 : 700; // 5% or 7%
    } else {
        feeBps = newDailyTotal <= threshold ? 300 : 500; // 3% or 5%
    }
}

Correct Usage Examples

Scenario 1: Small Trader (Core Mode)

  • 10 transactions of 0.3 ETH each = 3 ETH total
  • Exactly at threshold, all transactions pay 3%
  • Total fees: 0.09 ETH

Scenario 2: Large Trader (Core Mode)

  • 1 transaction of 4 ETH
  • Crosses 3 ETH threshold, pays 5%
  • Total fees: 0.2 ETH

Result: Small trader pays 55% less in fees despite same volume.

Advanced Mode Impact on Congestion

Advanced mode (with extensions) uses higher fee tiers (5-7% vs 3-5%) which creates stronger economic incentives for volume distribution:

  • Multi-Token Support: Applies same congestion-reducing logic to USDT and ETH
  • Enhanced Circuit Breakers: Additional volume limits prevent network overload
  • Stronger Incentives: Higher fees create more powerful congestion-reducing behavior

Security and Circuit Breakers

MEV Protection

The core contract implements built-in MEV protection:

modifier antiMEV() {
    if (lastBlockInteraction[msg.sender] == block.number) {
        revert Error.SameBlockTransaction();
    }
    lastBlockInteraction[msg.sender] = block.number;
    _;
}

This prevents users from making multiple transactions in the same block, reducing sandwich attack opportunities.

Daily Volume Circuit Breaker

uint256 public constant MAX_DAILY_VOLUME = 10000 ether;

modifier dailyVolumeCheck(uint256 amount) {
    uint256 currentDay = block.timestamp / 1 days;
    uint256 lastResetDay = lastVolumeReset / 1 days;

    if (currentDay > lastResetDay) {
        dailyVolume = 0;
        lastVolumeReset = currentDay * 1 days;
    }

    if (dailyVolume + amount > MAX_DAILY_VOLUME) {
        revert Error.DailyVolumeExceeded();
    }
    _;
}

This provides automatic protection against excessive volume that could destabilize the network and cause severe congestion.

Transaction Timing Optimization Tools

function simulateDailyFeeProgression(
    address coreContract,
    address user,
    uint256[] calldata transactions,
    bool isUSDT
) external view returns (
    uint256 totalFees,
    uint256[] memory feeBreakdown,
    uint256[] memory volumeProgression
)

This allows users to:

  1. Plan optimal transaction timing
  2. Optimize fee costs
  3. Understand threshold impacts
  4. Compare batch vs. individual transactions

Congestion Management API

function getVolumeIncentiveInfo(
    address coreContract,
    address user,
    bool isUSDT
) external view returns (
    uint256 currentVolume,
    uint256 remainingLowFeeVolume,
    uint256 nextResetTime,
    uint256 lowFeeBps,
    uint256 highFeeBps
)

This provides real-time congestion management information:

  • Current daily volume - Monitor network usage
  • Volume remaining before higher fees - Plan timing to avoid congestion
  • Exact reset time - Know when low-fee periods restart
  • Current fee rates - Understand congestion-based pricing

Performance Optimizations for Congestion Reduction

1. Custom Errors

error InsufficientDeploymentFee();
// vs
require(msg.value >= deploymentFee, "Insufficient deployment fee");

Saves ~22 gas per revert case.

2. Unchecked Arithmetic

unchecked {
    ++sellerActiveListings[msg.sender];
}

Used where overflow is impossible, saving ~20 gas.

3. Efficient Assembly for CREATE2

assembly {
    core := create2(0, add(bytecode, 0x20), mload(bytecode), salt)
}

Deterministic deployments with low gas footprint.

4. Struct Packing

struct PaymentProcessorConfig {
    address coreContract;        // 20 bytes
    bool hasExtensions;          // 1 byte
    uint88 reserved;             // 11 bytes = 32 bytes (slot 1)
    // ... optimized for 3 slots total vs 6 naive slots
}

Architecture Benefits

1. Modular Design

  • Core contract: Essential features only
  • Extensions: Advanced functionality
  • Factory: Deployment and tracking

2. Upgradeable Strategy

  • Core can be upgraded independently
  • Extensions can be added later
  • Factory manages compatibility

3. Network Agnostic

  • Ethereum mainnet ready
  • Polygon optimized
  • Chain ID detection built-in

Real-World Congestion Reduction Impact

Primary Goal: Network Congestion Reduction

By incentivizing volume distribution throughout the day, the system naturally reduces peak-hour congestion, leading to:

  • Smoother transaction throughput
  • Reduced gas price spikes
  • More predictable network performance

Fair Access Through Congestion-Based Pricing

Small traders get consistently low fees during normal periods, while large volume users pay proportionally more during their heavy usage periods.

MEV and Congestion Resistance

Large volume bursts are financially discouraged, reducing profitable MEV opportunities and congestion spikes. The anti-MEV protection further prevents artificial volume inflation.

Predictable Performance

Users can calculate exact fees before transacting and plan optimal timing to minimize both costs and network impact.

Integration Examples: Congestion-Aware Applications

Real-Time Congestion Monitoring

const factory = new ethers.Contract(factoryAddress, factoryABI, provider);

const volumeInfo = await factory.getVolumeIncentiveInfo(
    coreContract,
    userAddress,
    false // ETH mode
);

console.log(`Network usage: ${ethers.utils.formatEther(volumeInfo.currentVolume)} ETH`);
console.log(`Low-congestion capacity remaining: ${ethers.utils.formatEther(volumeInfo.remainingLowFeeVolume)} ETH`);

if (volumeInfo.remainingLowFeeVolume > ethers.utils.parseEther("1")) {
    console.log("Good time to transact - low congestion");
} else {
    console.log("Consider waiting for reset in", new Date(volumeInfo.nextResetTime * 1000));
}

Optimal Transaction Scheduling

const transactions = [
    ethers.utils.parseEther("1"),
    ethers.utils.parseEther("1.5"),
    ethers.utils.parseEther("1")
];

const simulation = await factory.simulateDailyFeeProgression(
    coreContract,
    userAddress,
    transactions,
    false
);

console.log(`Total fees with current timing: ${ethers.utils.formatEther(simulation.totalFees)} ETH`);

simulation.feeBreakdown.forEach((fee, index) => {
    const isHighFee = fee > ethers.utils.parseEther("0.05");
    console.log(`Transaction ${index + 1}: ${ethers.utils.formatEther(fee)} ETH ${isHighFee ? '(high congestion)' : '(normal)'}`);
});

Conclusion

The PaymentProcessor's dual-layer progressive fee system represents a breakthrough in congestion management for decentralized networks. By combining contract-wide volume tracking with per-user daily limits, it creates economic incentives that naturally distribute network load and reduce congestion.

Primary Congestion-Reduction Innovations:

  • Economic Load Balancing: Progressive fees automatically discourage congestion-causing behavior
  • Temporal Distribution Incentives: Users are rewarded for spreading transactions across time
  • MEV-Resistant Design: Built-in protections prevent artificial congestion from arbitrage bots
  • Circuit Breaker Protection: Automatic limits prevent catastrophic congestion events
  • Real-Time Monitoring: APIs enable congestion-aware application development

This system proves that smart economic design can solve network congestion more effectively than simply increasing throughput. By aligning individual incentives with network health, it creates a sustainable foundation for scalable DeFi infrastructure.

Technical Note: All code examples, constants, and function signatures are taken directly from the verified smart contracts. Gas optimization claims are based on EVM opcodes and verified through comprehensive testing.