How Does the Risk of Stale Blocks Influence a Mining Pool’s Payout Structure?
Mining pools often adjust their payout structures to account for the risk and cost of stale blocks. Payout schemes like Pay-Per-Share (PPS) or Full-Pay-Per-Share (FPPS) may factor in the expected stale rate to calculate a fair payout.
A high stale rate reduces the pool's effective revenue, which must be reflected in the payment to miners to maintain the pool's profitability and incentivize efficient mining practices.
Glossar
Stale Blocks
Impediment ⎊ Stale blocks, within cryptocurrency networks, represent computational efforts expended on transactions that are not incorporated into the main chain due to network conditions or consensus failures.
High Stale Rate
Inefficiency ⎊ A High Stale Rate signifies a substantial proportion of successfully mined or validated blocks that fail to become part of the canonical chain, representing wasted computational effort or staking resources.
Stale Block
Block ⎊ Within cryptocurrency and decentralized finance, a stale block signifies a block propagated across the network that arrives out of order, typically due to network latency or propagation delays.
PPS Payout
Payout ⎊ The term "PPS Payout," within cryptocurrency derivatives and options trading, denotes a proportional payout structure linked to the underlying asset's price movement.
Payout Schemes
Mechanism ⎊ Payout schemes, within cryptocurrency, options trading, and financial derivatives, represent the pre-defined rules governing the distribution of profits or losses to participants based on the outcome of an underlying asset or event.
Stale Rate
Inefficiency ⎊ The Stale Rate quantifies the network inefficiency by measuring the proportion of valid blocks that fail to be incorporated into the canonical blockchain due to propagation delays.