How Does a Mining Pool Operator Manage the Risk Associated with the PPS Reward System?

Under PPS, the operator guarantees a payout even if the pool does not find a block, effectively absorbing the variance risk. To manage this, the operator typically calculates the expected revenue based on the pool's hash rate and network difficulty.

They must maintain a reserve fund to cover payouts during periods of bad luck (fewer block finds). The PPS fee is usually higher than PPLNS to compensate the operator for taking on this financial risk.