Proposed change to PPLNS rewards
Posted: Tue May 24, 2022 12:33 pm
We're evaluating a potential change to the PPLNS rewards system, to address customer feedback. Some customers are concerned that later shares on blocks where the pool has had poor luck can result in a lower expected profitability compared to mining in FPPS mode.
The current formula
Currently, when a block is found, the reward is distributed using the following simple formula:
As you can see, every share is worth the same value, regardless of when it was submitted.
The proposed formula
In the proposed formula, more recent shares would be weighted so that the expected earnings from PPLNS mining are equal to those of FPPS, before the lower fees slightly increase the expected profitability. The new more complex formula for determining the value of a share would be:
As you can see, when enough mining has occurred such that a block would already have been, on average, expected to have been found, each share is then worth twice as much in score as were shares submitted at the start of the round. If a block still hasn't been found after enough mining where two would normally have been expected, then the latest shares will be worth twice as much as that share, and four times as much as the first share submitted in the round.
Effect of the changes
If this change is made, a customer earns the same expected value no matter when he joins in the round, preventing new customers from being discouraged because of the significant portion of the rewards already earned by customers who had previously mined. In the new system, customers who stopped mining a while ago will still earn some money, but their proportion of the payout will decline exponentially instead of linearly.
Should we make this change?
The current formula
Currently, when a block is found, the reward is distributed using the following simple formula:
Code: Select all
your_reward = (block_reward + transaction_fees) * (1.0 - pool_fee) * sum(your_share_difficulties) / sum(all_share_difficulties)
The proposed formula
In the proposed formula, more recent shares would be weighted so that the expected earnings from PPLNS mining are equal to those of FPPS, before the lower fees slightly increase the expected profitability. The new more complex formula for determining the value of a share would be:
Code: Select all
score = share_difficulty * 2 ^ (sum(all_share_difficulties_previously_submitted_for_this_round) / block_difficulty)
your_reward = (block_reward + transaction_fees) * (1.0 - pool_fee) * sum(your_scores) / sum(all_scores)
Effect of the changes
If this change is made, a customer earns the same expected value no matter when he joins in the round, preventing new customers from being discouraged because of the significant portion of the rewards already earned by customers who had previously mined. In the new system, customers who stopped mining a while ago will still earn some money, but their proportion of the payout will decline exponentially instead of linearly.
Should we make this change?