Block Demand Elasticity

Block demand elasticity refers to how sensitive the volume of transactions is to changes in the cost of using the network. When fees are low, demand for block space typically increases as more users and applications interact with the protocol.

Conversely, when fees spike, non-essential transactions are pushed out, effectively clearing the network of congestion. This responsiveness is critical for maintaining the health of the fee market.

Protocols with high elasticity can handle sudden bursts of activity better than those with rigid capacity. Understanding this concept helps in designing more robust decentralized applications that can withstand periods of high network cost.