For sake of example, suppose we have a marginal fee rate of 50 satoshis per
byte.  At that rate reducing the size of the witness data by 1 byte is
approximately equivalent from a miner and relayer's perspective as a
replace by fee that increases the fee by 50 satoshis.  In both cases miners
get an extra potential of 50 satoshis in revenue.

So in this sense replacing witness data with smaller witness data can pay
for its own relay cost as much as RBF can simply by requiring that the
smaller witness be smaller enough to cover the same RBF threshold.

On Tue, Aug 16, 2016 at 6:39 PM, Pieter Wuille <pieter.wuille@gmail.com>
wrote:

> On Aug 17, 2016 00:36, "Russell O'Connor" <roconnor@blockstream.io> wrote:
>
> > Can I already do something similar with replace by fee, or are there
> limits on that?
>
> BIP125 and mempool eviction both require the replacing transaction to have
> higher fee, to compensate for the cost of relaying the replaced
> transaction(s).
>
> --
> Pieter
>