Pools reward schemes

Every pool has its own reward method. In this article we will explain how different pool reward schemes work.

Pay-per-share or PPS reward method is the method that miners love the most, but it represents the highest risk for the pool. It means that the miner is paid for every (valid) share he or she contributes to the pool. However, since the pool only gets the coins if the block is found, this means it has to pay its miners also when there are no blocks found. That’s why pools usually prefer to use other reward methods. The ones that are using the PPS reward method, usually also have higher fees.

The proportional or PROP reward method works the opposite. In the PROP scheme, the miners are paid when and if the block is found and the reward depends on how many valid shares were submitted by the miner and contributed to finding that block. If one miner contributed 10% of the total shares that were needed to find the block and the reward in the block is 100 coins, the miner will get 10 coins.

The pay-per-last-N-shares or PPLNS reward method works in a similar way as the PROP scheme, however, it extends the period of the number of shares a miner has submitted over the last few blocks. This prevents so-called pool hopping (which a miner is doing if he or she is using profit switch too frequently) and penalizes disloyalty to the pool. On such pools, a miner will see that he or she earns a very small reward, but with time, the earnings slowly climb to the expected number.

The dynamic pay-per-last-N-shares or DPPLNS reward method works in a similar way as the PPLNS, but with an additional mechanism that dynamically decides for how many last blocks the submitted shares will be checked. It also eliminates the issue of very small rewards at the beginning of the mining.

PPS+ reward method is a combination of PPS and PPLNS rewards. The base block reward is paid under PPS reward scheme, while transaction fees in the block are paid based on PPLNS method. Jumping to a pool when transaction fees in the block are high, might not yield the expected results and earnings in such case.

FPPS means full pay per share and it means both base block reward and transaction fees in the block are paid under PPS reward scheme.

SOLO means the miner gets paid only when that miner finds a block and not when anyone else gets it. The pool provides it's node-running service for a commission, but the miner gets both the block reward and transaction fees in the block.

PPLNS+ reward method is a variation of PPLNS which averages distribustion according to block output. The limitation of earning a very small reward at first is still there, but the earnings climb to the expected number - expected to see in 24 hours.

DGM means Double Geometric Method, which is a hybrid of Geometric and PPLNS methods. The value of share is calculated in the beginning of each round, and during short rounds the pool buffers some of the reward to pay out during longer rounds.

PPLNT means pay-per-last-N-timeframes, which is similar to PPLNS however instead of using the block search rounds as source for averaging the amount of shares, it uses specific amounts of time (i.e. 30 minutes).

RBPPS is similar to PROP, as it distributes the reward based on the PROP method. The difference is that it bases not on the time network takes to mine the block, but the time the pool took to find block since last block it found. Miners get rewarded after the new block's been mined.

PPLTS means pay-per-loyal-time-share and is a combination of PROP with PPLNS — the ramp-up curve is approximately 1 hour each time miner switches to this pool and the share value has a curve which benefits miners with consistent hashrate, and "punishes" hashrate spikes.

PSOLO2 is a predictable SOLO reward method. The miner gets rewarded once the total contribution of the miner reaches the current network difficulty.

PPROP is a predictable proportional reward method. The miner gets paid when the pool finds the network difficulty and gets paid proportionally to the hashes submitted in that round.

PARTY is a version of PROP with a few changes to take note of. It's a private PROP pool reward method, with authorization via password, and pays only proportional to the shares in the last 24 hours. Once the block is found, the 24 hours and shares counters are reset.

PPTS means pay-per-timeframe-shares. The method is similar to PPLTS. Every round of 30 seconds, the pool calculates, how much the miner earned during that 30 seconds round, basing on the miner's 24h average hashrate. After accumulating 20 rounds (so each 10 minutes), the timeframe ends, and the rewards are transferred to unpaid balance and are paid out when the miner reaches the payout threshold. This method protects the loyal users from hashrate spikes.