Scaling Noncustodial Mining Payouts with CTV

The discussion revolves around the critique of employing Covenants (CTV) for improving the process of mining pool payouts and its impact on scalability and decentralization in blockchain. The primary concern raised is the skepticism towards arguments favoring the use of CTV for "vaults" and non-custodial mining payouts, highlighting a critical view towards proposals that may not effectively contribute to scalability or decentralization but are presented as beneficial solutions.

The argument against using CTV for mining pool payouts centers on the notion that it does not fundamentally solve scalability issues but rather shifts them. Specifically, the point is made that while CTV might delay when payout transactions hit the blockchain, this approach results in increased block space usage, which contradicts the principle of scalability. Additionally, there's an acknowledgment of potential uses of Layer 2 solutions for payouts, yet with reservations regarding their economic viability due to costs associated with unilateral exits from these solutions.

Moreover, the conversation touches upon the concept of congestion control via CTV, suggesting it allows for fee smoothing over periods without necessitating custodial dependence. However, this is critiqued as being mistakenly promoted as a scalability solution when in fact, it might only offer a different method of managing payouts within mining pools. The critique emphasizes the need for clarity and honesty in arguments promoting technological solutions within the blockchain space, urging for a careful evaluation of ideas to distinguish genuinely scalable innovations from those offering marginal or no real benefits to decentralization and scalability challenges.