Radpool - Syndicated Mining Pool

Mission: Build a Decentralised, Scalable, Open Source Mining Pool

Current bitcoin mining pools are resulting in ever increasing centralisation pressure on mining pools. This centralisation pressure is increasing the threat of transaction censorship in bitcoin.

We need a solution to decentralise mining to resist transaction censorship. In the current efforts, the pools are still either run from a single central entity or are trying to be fully P2P. Both the approaches have challenges. Single entity pools are by their very nature centralised, and full p2p pools are challenging to scale to a point where they can provide enough reduction in block discovery variance.

In these pages, we present a novel design - Radpool - that breaks up the centralised single entity into a syndicate running the pool. This alleviates the scalability challenges faced by a fully p2p pool while increasing mining decentralisation, thus improving the resilience to transaction censorship.

The syndicate is run by a network of Mining Service Providers (MSPs). Each MSP serves the miners that register with them. This registration process is the same as miners currently use to register with centralised pools. MSPs then provide services to miners like building blocktemplates, running stratum servers and funding payouts.

syndicated pools
Figure 1. Radpool - Syndicated, Decentralised Mining Pool

The salient features of the design presented are the following:

  1. Block template construction is decentralised as each MSP builds an independent blocktemplate.

  2. MSPs pay miners over futures contract built using DLCs.

  3. Radpool acts as an Oracle where a threshold number of MSPs generate the signature required to settle DLCs.

  4. MSPs earn a yield in exchange of locking liquidity that fund payouts for miners.

  5. Share accounting is transparent, making the pool fully auditable.

  6. The payout mechanism allows unilateral exits for miners and MSPs, providing non-custodial payouts to miners.

  7. Switching to Radpool from current centralised pools has zero friction for miners.

In the rest of the document we explain how the MSPs operate the mining syndicate and the payout mechanism that provides the above listed features.