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Author Topic: Investor Funded PPS Pool - Concept.  (Read 1033 times)
nibor
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April 16, 2013, 10:40:30 PM
 #1

Anyone thought of setting up a funded PPS pool?

To give investors a 99% chance of getting their money back you need a fund of 2878 BTC.
https://bitcointalk.org/index.php?topic=95378.msg1706648#msg1706648


You could structure like this:
1) Offer is open for max of 30 days. If you do not get sent 2878BTC in that time money is returned.

2) Block Reward is paid in to this fund- fees going to pool operator, and miners payments paid out of fund. When miners are paid pool operator is paid 0.5% on a PPS basis. (The fees give pool operator the incentive to avoid orphans). So miners are charged 2.5% fee for a PPS pool.

3) Once fund reaches 3500BTC it starts paying out excess over that amount every day at 12 midnight to investors in proportion to their investment. (If there is some bad luck and it drops below that then payout stop till it is back above that).

4) If pot is ever reduced to zero. The pool closes and investors lose their investment. (Obviously pool operator could at this point try to raise another fund?).

5) When the block reward halves the level the fund needs to be to paying out is halved (to 1750) so investors get a big payout. This repeats every halving day.

6) Pool operator would have the option of reducing the 2%, but only if pool operator reduced their percentage by the same amount. (i.e. operator could half investors income only if operator halved theirs - including the fee income). This would allow operator to keep pool competitive if need be.


Why would anyone invest?
Assuming pool gets to be 10% of the mining total. Investors would get 7.2BTC a day which is 2628BTC a year. So a 100% return a year for 4 years, then half their money back etc... And if you get more than 10% of mining pool share then they get an even better return. To get a 10% per year return only need to get to 1% of mining total.

Why would pool operator do it?
Operator to get all fees on a large number of blocks. Get 0.5% PPS income on a large pool. As years go by you get larger and larger share of income as is fee based.

Why would miners mine there?
They could see a pot of 2800BTC that is guaranteeing their payouts, and to fund the immature blocks. So would be 100% confident of receiving payment.
You would be cheapest PPS pool with fees of 2.5%.


I did send this to fireduck as HHTT seemed the perfect pool to use to do this with but got no reply...
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firefop
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April 17, 2013, 08:22:37 AM
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 It's an interesting idea... but frankly... why bother.

Why not just use something along the lines of Eligius payout schema so the pool can never go broke. . .


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April 17, 2013, 08:55:15 AM
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It's an interesting idea... but frankly... why bother.

Why not just use something along the lines of Eligius payout schema so the pool can never go broke. . .



Most miners like steady income.

Yeah a payment system like eligius will keep the pool on the safe side but miners income is never steady.

Take a look at Eligius CPPSRB Variance on their home page.
They have been paying miners 93% PPS for a long time.
Miners who are mining on eligius now is mining on a 7% fee PPS pool.


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