Bitcoin mining has come a good distance because the days of GPUs and basement set ups. In that point, miners have superior in numerous methods. For instance, ASICs at the moment are the usual, not GPUs. Moreover, enterprise grade gamers have entered the sphere, opening new frontiers and bringing with them the scale and institutional recognition that opens the doorways to in any other case unreachable locations for smaller miners. These days, the mining panorama is one the place grid companies, curtailment methods, and power market participation are now not edge circumstances however core methods. Because the world round it has moved ahead, there’s one query we hold listening to from miners: can PPLNS adapt?
Many miners, significantly these working intently with power suppliers or integrating Demand Response mechanisms, have come to view PPLNS with suspicion. They fear that it penalizes downtime and rewards solely uninterrupted hashrate—a nasty deal for many who routinely curtail machines to assist the grid or present different companies.
This worry isn’t baseless. It traces again to a pivotal second within the mining trade’s latest previous, one which apparently sealed the deal for a lot of on PPLNS type payouts: the fallout between RIOT and Braiins Pool.
On the time, Braiins was utilizing the Rating payout system. Designed in 2011 by Slush himself, Rating was engineered to resolve the issue of pool hopping—when miners would leap between swimming pools to take advantage of reward techniques. There’s additionally been a false impression that Rating is a PPLNS type fee system, however as Rosenfeld’s bible on pool payout techniques describes, Rating and PPLNS are distinctly totally different payout strategies. The principle distinction is how they account for shares, particularly, Rating applied a rolling window with exponential decay operate, this successfully made the lookback window very brief. Then again, PPLNS is a household of payout techniques with numerous sorts of mounted size lookback home windows.
As proven on this archived web site of how Rating labored, you’ll be able to see that after 90 minutes your hashrate had no extra presence on the pool. Which means the second a miner begins mining, their share of rewards pretty rapidly reaches the truthful worth of the hashrate. Then again, when a miner stops mining, it drops equally quick, as proven on the gif under.
This might need labored effectively within the period of cowboys and hackers, nevertheless it was by no means designed with at this time’s advanced mining environments in thoughts. Actually not with Demand Response, the place miners deliberately and profitably take machines offline to stabilize power grids or bid into ancillary markets. To Rating, that type of habits seems no totally different than a pool hopper—somebody making an attempt to cheat the system.
So when RIOT left Braiins, citing issues about payout mechanics, it despatched a shockwave by means of the mining world. As a result of aforementioned false impression, Rating system’s flaws received unfairly projected onto a broader class of payouts, PPLNS received caught within the fray, catching a stray bullet within the course of, and the trade collectively threw the newborn out with the bathwater.
However the mining world has modified, and it’s time for the phoenix to rise from his ashes.
SLICE: A Payout Mechanism for the twenty first Century Grid
Enter SLICE, a contemporary, open-source Stratum-V2-ready payout system created by the DMND group. It’s an enchancment and evolution of PPLNS, that rethinks how miners receives a commission, rewards are calculated, and —most significantly— how downtime is handled respect
to Rating. All whereas preserving miner’s proper to construct their very own block templates with SV2.
At its core, SLICE is about equity and transparency. It preserves the foundational concept of PPLNS—paying miners in proportion to their precise contribution to fixing blocks—whereas modernizing it for at this time’s decentralized mining panorama.
The important thing innovation lies in how SLICE buildings reward calculation, and on how the lookback window works. Reasonably than treating your complete pool as a monolith, SLICE breaks time into smaller, dynamic “slices” of labor to correctly distribute the charge part. These slices symbolize batches of shares submitted over a particular interval, the place we management for the quantity of charges within the mempool, and examine and rating totally different job templates for the monetary worth they symbolize. When a block is discovered, SLICE distributes the block subsidy and transaction charges individually. The subsidy is allotted proportionally by hashrate, whereas the charges are distributed based mostly on hashrate and monetary worth.
That is significantly related in a world the place miners can select their very own transaction units. Some miners could prioritize high-fee MEV-style bundles; others could exclude sure sorts of transactions for ideological, political or technical causes. SLICE ensures that, inside every slice, miners are rewarded in accordance with each the amount and high quality of their work—with out punishing them for downtime or strategic power choices. For these curious to be taught extra, this text can show useful.
Demand Response With out Penalty
What makes SLICE particularly enticing for miners taking part in Demand Response or curtailment applications is that it doesn’t penalize you for being offline.
That’s as a result of SLICE doesn’t decay your payout simply since you took a break. Your shares stay within the PPLNS window—the rolling window of latest work that’s eligible for payouts—so long as they’re latest sufficient. On this manner, every share is handled independently, and is anticipated to get 8 payouts, since SLICE makes use of an 8-block rolling window, every legitimate share stays eligible for payout throughout the following 8 blocks on common. Which means no matter how massive or small the pool is, you’ll by no means have the abysmal luck of consuming up unhealthy luck days with no block, disconnecting, having the pool discover a block, and never receives a commission.
Which means miners can energy down throughout peak demand hours, assist their regional grid, and nonetheless acquire their truthful minimize from blocks discovered after they resume operations, most significantly, even whereas they’re offline, if their shares are nonetheless within the window. In different phrases, if the pool has a streak of unhealthy luck, after which the miner is named to carry out demand response and shuts off, even when the pool finds a block throughout their down time, that miner will receives a commission their justifiable share for on a regular basis they have been on-line. That’s as a result of every share generated throughout that point might be energetic and getting paid for 8 blocks on common.
This isn’t a workaround. That is the characteristic. It makes SLICE absolutely suitable with fashionable power methods that require flexibility, whether or not you’re taking part in frequency regulation markets, ramping down throughout grid emergencies, or just optimizing for off-peak pricing.
For instance, let’s say {that a} miner is mining at a pool, and the pool hasn’t discovered that day’s block but. Which means the pool hasn’t discovered the block but, and thus the miners hasn’t gotten paid for that day but. Now, the miner shuts off to supply ancillary companies throughout peak summer time load for a couple of hours, throughout that point, the pool finds the block. In a Rating based mostly pool, the miner wouldn’t see a single Sat of that after 90 minutes, when the decay has had full impact. However even when the pool discovered a block half-hour later, because of the exponential decay, the miner would barely see something. Then again, the miner would have the entire shares they mined over the day obtain a fee, since every share receives on common 8 funds. Thus, the miner would profit within the good occasions, and never be penalized within the unhealthy occasions.
Cost Transparency and Auditability
Moreover, SLICE doesn’t simply modernize payout equity—it does so in a manner that minimizes belief within the pool operator. Each slice is absolutely auditable. Every share is tracked, listed, and publicly verifiable by any miner, so miners can independently confirm their share of the block reward. There’s no black field, no “belief me bro.”
And if the pool operator makes an attempt to cheat—say, by injecting pretend shares to dilute payouts—miners can problem the integrity of the slice. The Job Declaration extension to Stratum V2, which SLICE depends on, contains mechanisms for publishing share information, verifying Merkle roots, and guaranteeing that every share corresponds to actual computational work.
For miners who care about decentralization, SLICE isn’t only a fee scheme—it’s an accountability device.
From Defensive to Strategic
The shift from Rating to SLICE represents greater than a technical improve. It’s a psychological shift. Mining swimming pools now not must defend in opposition to unhealthy actors by penalizing everybody. As a substitute, they’ll construction payouts in a manner that displays actuality: that miners are subtle contributors working not solely within the Bitcoin blockchain, but additionally the power ecosystem.
With SLICE, PPLNS stops being a legal responsibility and turns into a strategic benefit. It permits higher income seize, extra transparency and auditability, and smoother integration with grid companies.
And in a world the place uptime is non-compulsory, however equity is non-negotiable, that’s precisely what enterprise-grade miners want, a strategic pool companion that pushes ahead and innovates, bringing the longer term at this time and enabling miners to make more cash with the identical {hardware}.
It is a visitor submit by Normal Kenobi. Opinions expressed are completely their very own and don’t essentially mirror these of BTC Inc or Bitcoin Journal.
