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Author Topic: [GLBSE] SLUSH'S POOL Miner Variance Protection.  (Read 2558 times)
organofcorti
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July 10, 2012, 09:28:18 AM
 #1

tl;dr: Reduce your mining variance due to both luck and Slush's score method by receiving  a coupon claim based on the total number of shares submitted to Slush's pool, mining.bitcoin.cz - in effect you mine as usual and receive a Pay-Per-Share payment, for a much lower fee than most pure PPS pools offer.

Miners at Slush's pool experience increased variance over a standard proportional payment such as DeepBit.net provides due to the scoring method. By purchasing insurance, you will be paid an amount solely based on the number of shares submitted to the pool in a given period of time. This means you can mine on a pool you prefer, with a pool operator you trust, and still be able to receive a very low fee Pay-Per-Share type payment.

GLBSE link: https://glbse.com/asset/view/MEI.SLUSH.A - active

100 bonds will insure approximately 1438 Mhps in a 1:1 ratio (this will vary slightly depending on the Difficulty change).

MEI.SLUSH.A is now available at 0.1020 btc / bond, and will start paying coupons from blockheight 191520. Every 46 rounds a coupon will be paid for 184 rounds.

If you wish to purchase any bonds after activation you will need to place a bid. If anyone wants to find out what I will accept for a bid at any point, please PM me.



GLBSE link: https://glbse.com/asset/view/MEI.SLUSH.B - inactive

Those people buying and selling MEI.SLUSH.B bonds, please cease trading. This bond has expired and will pay no more coupons. Please send me your bonds so I can retire the security.


General information
Ticker: MEI.SLUSH.B

Company name: Miner Earnings Insurance

Short description: A bond insuring against miner earnings shortfalls on mining.bitcoin.cz, aka Slush's pool. The holder of this bond will be paid 10 coupons at regular intervals for the lifetime of the bond.

Quantity to issue: 1000

Operation:
Insurance will be provided in the form of a bond. Coupons for the bond will be paid ten times in approximately a two week period, starting immediately after a difficulty retarget, ending at a predetermined number of rounds.

A best effort will be made to ensure coupons will be paid at 12:00 UTC on the completion of every 10th percentile of the round lifetime, so coupons will be received every one to three days depending on pool hashrate changes.

Each coupon will pay an amount calculated as follows:

Code:
Payment = Total block shares submitted since last coupon / Difficulty at which block shares were submitted / 10 * 0.1

Expiration:
The number of rounds for which a bond will be active is based on a pool's previous week's average hashrate to provide an estimated two weeks of operation before expiry, as follows:

Code:
Rounds for bond = trunc(7 day average hashrate / 2^32 * 3600*24*14 / 10) * 10

Depending on how close Slush's actual hashrate is to the estimated hashrate, the coupon may expire sooner or later than the fourteen day estimate. This does not affect the value of each coupon or the total coupon amount over the life of the bond.

Expected value:
The expected value of each coupon is 0.01 btc, for a total expected payment of 0.1
The difference between the lifetime expected value of the bond and the bond IPO price reflects the risks to the insurer. Coupon payments are, in effect, a type of Pay-Per-Share payment, offsetting any bad luck a miner may encounter due to larger than expected rounds.

The probabilities of various coupon payments and lifetime bond values are given below, related to Slush's average hashrate. The results are identical to PPS payouts based on the same pool round lengths.  

Probability of expected lifetime value of bond exceeding a particular % return, for various possible Slush's pool hashrates:



Coupons:
Coupons will be paid ten times during the lifetime of the bond, after Slush's pool completes a number of rounds ie. the nth coupon will paid after Slush's pool completes n/10 * lifetime rounds. Again, the results below are identical to a PPS payout based on Slush's pool's round lengths.

Probability of expected value of each coupon exceeding a particular % return, for various possible Slush's pool hashrates:



Calling:
This bond is callable, in which case MEI.SLUSH.B will pay:
Code:
Expected remaining value of the bond * IPO price / 0.1

The remaining value of the bond when called before a particular coupon is as follows:

         Remaining value
Called before:     of the bond            
1st coupon          0.10
2nd coupon          0.09
3rd coupon          0.08
4th coupon          0.07
5th coupon          0.06
6th coupon          0.05
7th coupon          0.04
8th coupon          0.03
9th coupon          0.02
10th coupon         0.01


Please note that this is not approved by or executed in conjunction with mining.bitcoin.cz, and data for calculating the coupon amount is obtained from publicly available information only.

I welcome any comments, suggestions or requests.

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July 14, 2012, 12:09:37 PM
 #2

MEI.SLUSH is available now for 0.102 btc / bond for an expected value of 0.100 - an effective fee of approximately 2%. It will be removed from sale at block height 189503, after which we will start paying coupons. The bonds will be valid for 180 mining.bitcoin.cz rounds, and pay coupons every 18 mining.bitcoin.cz rounds.

GLBSE link: https://glbse.com/asset/view/MEI.SLUSH.B

100 bonds will insure approximately 1.335 Mhps in a 1:1 ratio (this will vary slightly depending on the Difficulty change).

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July 15, 2012, 11:51:52 PM
 #3

MEI.SLUSH.B will activate in about 36 hours, and after this point no more insurance will be sold for the Difficulty period.



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July 18, 2012, 01:40:55 AM
 #4

MEI.SLUSH.B has activated, and will start paying coupons at 18 mining.bitcoin.cz (Slush's pool) rounds solved.
I have removed my asks now, so if you wish to purchase bonds, place a bid or pm me.


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July 19, 2012, 03:42:18 PM
 #5

First coupon paid: 0.0104263 per bond, 4.26% above expected.


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July 21, 2012, 11:29:36 AM
 #6

Apologies for not paying coupons two and three sooner - Slush's hashrate is a bit more than it was last week so they're knocking the blocks over quickly and I'm finding it hard to get onto GLBSE.

Payment date       |  Total paid   |  Shares paid |   Payment per share
2012-07-19 11:38   0.0521315          5          0.0104263
2012-07-21 07:12   0.04202585        5          0.00840517
2012-07-21 07:15   0.0548524          5          0.01097048



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July 25, 2012, 07:59:19 AM
 #7


Payment date       |  Total paid   |  Shares paid |   Payment per share
2012-07-19 11:38   0.0521315          5         0.0104263
2012-07-21 07:12   0.04202585         5         0.00840517
2012-07-19 11:38   0.0521315          5          0.0104263
2012-07-21 07:12   0.04202585        5          0.00840517
2012-07-21 07:15   0.0548524          5          0.01097048



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July 27, 2012, 09:18:51 AM
 #8

Total coupons paid so far is + 8.8% more than expected.

Code:
Payment date   |      Total paid|  Shares paid | Payment per share
2012-07-19 11:38 0.0521315 5 0.0104263
2012-07-21 07:12 0.04202585 5 0.00840517
2012-07-21 07:15 0.0548524 5 0.01097048
2012-07-24 11:48 0.0656677 5 0.01313354
2012-07-25 03:54 0.0763869 5 0.01527738
2012-07-27 05:06 0.0432271 5 0.00864542
2012-07-27 05:07 0.0467838 5 0.00935676



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July 29, 2012, 05:12:56 AM
 #9

Total coupons paid so far: 8.58 btc / 100 bonds, + 7.3% more than proportional.

Code:
Payment date   |      Total paid|  Shares paid | Payment per share
2012-07-19 11:38 0.0521315 5 0.0104263
2012-07-21 07:12 0.04202585 5 0.00840517
2012-07-21 07:15 0.0548524 5 0.01097048
2012-07-24 11:48 0.0656677 5 0.01313354
2012-07-25 03:54 0.0763869 5 0.01527738
2012-07-27 05:06 0.0432271 5 0.00864542
2012-07-27 05:07 0.0467838 5 0.00935676
2012-07-29 01:06 0.04780825 5 0.00956165



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July 30, 2012, 07:44:17 AM
 #10

Coupon payout for pay number 9 is 0.0130545 per coupon. This is 30.5 % of expected for the coupon and 9.8 % of expected for the bond
Code:
Payment date   |      Total paid|  Shares paid | Payment per share
2012-07-19 11:38 0.0521315 5 0.0104263
2012-07-21 07:12 0.04202585 5 0.00840517
2012-07-21 07:15 0.0548524 5 0.01097048
2012-07-24 11:48 0.0656677 5 0.01313354
2012-07-25 03:54 0.0763869 5 0.01527738
2012-07-27 05:06 0.0432271 5 0.00864542
2012-07-27 05:07 0.0467838 5 0.00935676
2012-07-30 03:29 0.0652725 5 0.0130545


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July 31, 2012, 02:37:08 AM
 #11

MEI.SLUSH.A is now active and asks have been removed. If you wish to purchase any bonds you will need to place a bid. If anyone wants to find out what I will accept for a bid at any point, please PM me.

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July 31, 2012, 12:10:57 PM
 #12

MEI.SLUSH.B coupon payout number 10 (last coupon payment for this activation) is 0.00901953 per coupon. This is -9.80 % of expected for the coupon and 7.9 % of expected for the bond.

The bond is now inactive. Please return your bonds, since this bond hasn't been made properly callable.

Code:
Payment date   |      Total paid|  Shares paid | Payment per share
2012-07-19 11:38 0.0521315 5 0.0104263
2012-07-21 07:12 0.04202585 5 0.00840517
2012-07-21 07:15 0.0548524 5 0.01097048
2012-07-24 11:48 0.0656677 5 0.01313354
2012-07-25 03:54 0.0763869 5 0.01527738
2012-07-27 05:06 0.0432271 5 0.00864542
2012-07-27 05:07 0.0467838 5 0.00935676
2012-07-30 03:29 0.0652725 5 0.0130545
2012-07-31 08:02 0.04509765 5 0.00901953


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August 04, 2012, 09:46:11 AM
 #13

MEI.SLUSH.A coupon payout number 1 is 0.02358004 per coupon. This is -5.68 % of expected for the coupon and -5.68 % of expected for the bond.


Code:
Payment date   |      Total paid|  Shares paid | Payment per share
2012-08-04 05:18 0.09432016 4 0.02358004


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August 06, 2012, 07:40:27 AM
 #14

MEI.SLUSH.A coupon payout number 2 is 0.02404289 per coupon. This is -3.83 % of expected for the coupon and -4.75 % of expected for the bond.


Code:
Payment date       |  Total paid|  Shares paid | Payment per share
2012-08-04 05:18   0.09432016         4            0.02358004
2012-08-06 03:31   0.19234312         8            0.02404289


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