Fee Selection for CTV-Based Mining Pool Fanouts

This model employs a share accounting system similar to TIDES and manages payouts either directly through coinbase outputs, carry-forward balances, or precommitted CTV fanouts. The primary implementation can be accessed at Prism Pool, and the full source code is available on GitHub. Due to compatibility issues with existing miner firmware that require keeping the coinbase size manageable, most payouts are executed through CTV fanouts, where fee structures are predetermined. This approach also mitigates risks linked to dust transactions by ensuring each payout covers its fee and meets a minimum economic threshold.

There's no need for a funded relayer in this system; anyone possessing the artifact can broadcast it upon maturity, which simplifies the process and reduces dependency on additional resources. This method not only avoids the complexities associated with managing a funded wallet but also highlights the emphasis on minimal trust and operational assumptions within the pool software. However, challenges arise concerning transaction fee management, as current estimations use the node’s predicted rate plus a 20% increase, a method under reconsideration due to potential volatility. Alternative strategies being considered include employing a fixed premium method or averaging fees over several days to buffer against spikes, striving for a balance between predictability and economic viability.

Further insights reveal concerns about the standardness rules of transactions, which are not mandatorily followed by block producers, thereby allowing mining pools to include non-standard payout transactions in blocks they mine without issues. This scenario was demonstrated by projects like slipstream, suggesting that these rules can be circumvented, enhancing flexibility in transaction broadcasting. Additionally, if non-standard fanout transactions are hosted where miners can access them, possibly via an API, miners could attach their own fee to a 0-sat anchor and broadcast it to the mempool, transforming it into a standard package that can be relayed across the network.

The proposed ecash payouts for small miners describe a system where the pool operator includes the largest balances directly in the coinbase transaction, sending excess outputs to an ecash mint for distribution among smaller miners. This strategy attempts to reduce custodial trust by involving a third party, though it doesn't eliminate it entirely. Such systems have to address the issue of tiny payouts that might not cover on-chain fees, potentially trapping funds in a custodial manner unless balances accumulate to a viable size. This ongoing dilemma underscores the fundamental limitations of blockchain technology concerning small-scale transactions and emphasizes the need for an evolution towards more trustless off-chain transactions.