Fee Selection for CTV-Based Mining Pool Fanouts

The discussion focuses on the technical strategy of handling transactions in a blockchain system, specifically addressing the design choices around funded relayers and fee management. The model presented removes the need for a funded relayer, allowing anyone in possession of the artifact bytes to broadcast a fee-paying fanout at maturity without requiring a wallet, capital, or package relay. This approach prioritizes optimizing the initial onboarding transaction rather than the recurring payout process, which is an unusual choice given that continual payouts represent the majority of transactions.

The original design incorporated a modest transaction fee of 1 sat/vb, sourced from the coinbase output, along with an anchor output that allows users to fee bump if necessary. This setup ensures that miners with low time preferences can wait for natural low-fee periods to have their transactions processed, while miners with higher time preferences might incur additional costs to expedite the process. This method provides a fair balance by potentially distributing the fee burden across different participants based on their urgency.

Moreover, the email touches upon the challenges posed by standardness rules in transaction broadcasting within the Bitcoin network. These rules, distinct from core Bitcoin protocols, effectively regulate or limit the types of transactions that can be propagated through node networks prior to being mined. However, it's pointed out that these constraints can be circumvented. For instance, Peter Todd's Libre Relay initiative demonstrates the feasibility of loosening these restrictions through a specialized subnet of nodes, and slipstream illustrates that bypassing standardness rules does not hinder the mining of transactions. This indicates a broader implication for mining pools, as they are not required to adhere to these standardness rules when including transactions in blocks they produce, thus allowing more flexibility in managing payouts within the blockchain framework.