Capital Requirements For MSPs
The capital required to fund the pool is distributed across the MSPs reducing the capital risks for any individual MSP. Each miner’s payout is pre-funded by a syndicate member. The terms and fees are agreed upon between the two parties and the syndicate does not impose any requirements on these terms.
Match Making
One miner thus chooses an MSP that funds their payout contract. This match making between MSP and miner happens on mailing lists, forums or OTC between the two parties.
Each MSP funds payout contracts for a set of miner. Therefore the capital requirement for each MSP is related to the hashrate the miners bring to the pool. The Radpool syndicate has no view on the DLC contracts between the MSP and the miner. Radpool’s miner dashboard provides a view in to the balance and allows the contracts to be extended, or the miner can get into a contract with another MSP.
Incentives to Grow The Syndicate
When a new member joins a syndicate, the existing members will see reduced earnings because the block reward is now distributed between more miners and the fees are also distributed across more syndicate members. The syndicate however is still incentivized to include a new MSPs as a larger syndicate will be able to manage payouts for larger number of miners. A larger set of miners thus reduce variance even further and increase the aggregate earning for the pool. This flywheel effect is important for any syndicate to try and achieve and thus expanding the size of the syndicate is important for increased profits for the entire syndicate.
