Block reward and transaction fees over time

Question

I am trying to understand how block rewards have evolved over time in Monero. I downloaded the blockchain and plotted the reward field from each block. Because it looked a bit strange, I plotted the major versions from the blocks as they first appear on the same chart to see if it helps:

The trend is declining as one would expect. However, there are a few things I do not quite understand in this:

1. Why does the reward look like it resets at the point where major version 2 appears in the block? I could not find any explanation for this, maybe because it is a bit long time ago.

2. What are the high spikes in the rewards? The two highest between v1 and v2 are in blocks at height 262990 and 249092. The transaction at 249092 is only for about 0.12XMR but has a fee of 37.87XMR. The one at 262990 is for about 0.95XMR with a fee of 49.9XMR. I tried to look up how the fees are calculated (which I guess are added to the reward), I only found some fixed set of priorities, which seems to better match the latter smaller spikes. Was it possible to set a fee manually in the first version, and someone just played with it, or what are these big spikes?

3. How is the reward at times (in v1 and appears to be also in v4) much smaller than what I would expect is the "reward curve"? For example, the block at height 80412 has a size of 38.9kB. Maybe because it contains a transaction with over 350 inputs. This is much larger than most others I saw. As far as I understand, a bigger block size would have higher fees. Yet its block reward is only about 0.24XMR, with the three transactions it holds totaling to a fee of 0.000004XMR. Blocks surrounding this block have a reward of about 16.3XMR, which seems in line with the "reward curve". 0.24XMR is far below the curve. Again, this is in the very first block version, but I could not find an explanation.

Are there some changes over time on how the block reward (and associated fees) change over time? Are such changes over the (major) block versions documented somewhere?

Answer 1

1. Why does the reward look like it resets at the point where major version 2 appears in the block?

   Transaction v2 (Monero v10) was the introduction of RingCT. There were various fee related changes over the Monero v10.x.x releases to account for the size changes introduced by RingCT. As @dEBRUYNE notes, the block time changed earlier that year too, to retain the original emission schedule – this is what the jump in your chart shows.

2. What are the high spikes in the rewards?

   The spikes you reference are in transaction fees, not the block reward. Also, just because someone constructed a transaction with a high paying fee, this is not necessarily a reflection of the norm. For example, the transactions immediately before and after the high paying transaction you reference in block 262990 only pay 0.100 and 0.146 respectively. The block reward for each of those blocks was ~13.72, steadily reducing.

3. As far as I understand, a bigger block size would have higher fees... but I could not find an explanation

   Not necessarily. Miners create blocks and they incur a penalty for creating unusually large blocks, hence the block reward is reduced, via the penalty function. Miners are not obliged to include large transactions just as senders are not obliged to pay higher fees.

Answer 2

Why does the reward look like it resets at the point where major version 2 appears in the block? I could not find any explanation for this, maybe because it is a bit long time ago.

The block time was increased from a targeted one minute per block to a targeted two minutes per block in the scheduled upgrade of March 2016. In order to properly retain the original emission schedule (and thus not change the social contract of Monero), the block reward had to be doubled. Your graph essentially reflects that.