Mining Payout Schemas
Mining pools and solo setups distribute block rewards through different payout schemas. Each schema trades off variance (how predictable your income is), fees (what the operator charges), transparency (how rewards are calculated), and sovereignty (how much control you retain over block templates).
Bottom line: There is no universally best schema. The right choice depends on your hash rate, electricity stability, risk tolerance, and whether you value predictable cash flow over long-term fee minimization.
At a Glance
| Schema | Type | Variance to Miner | Pool Fees | Tx Fees | Transparency | Template Control |
|---|---|---|---|---|---|---|
| PPS | Pay Per Share | None | Higher | Excluded | Low | None |
| FPPS | Full Pay Per Share | None | Higher | Included | Low | None |
| PPLNS | Pay Per Last N Shares | High | Lower | Included | Medium | None |
| TIDES | Transparent Income-Dividend Even-Share | Moderate | Lower | Included | High | Full (via DATUM) |
| Solo | Self-mining | Extreme (all or nothing) | None | Full | Full | Full |
Schema Breakdown
PPS — Pay Per Share
The pool operator pays a fixed amount for every valid share submitted, regardless of whether the pool finds a block.
- Variance: Zero for the miner. Every share earns something.
- Fees: Higher (typically 2–4%) because the operator absorbs all variance risk.
- Transaction fees: Excluded. Miners earn only the block subsidy portion.
- Best for: Miners who need predictable cash flow to cover fixed costs (rent, electricity contracts).
- Trade-off: You pay a premium for stability. Over long time horizons, PPLNS or TIDES typically yield more.
FPPS — Full Pay Per Share
Same as PPS, but the fixed payout includes an estimate of transaction fees.
- Variance: Zero for the miner.
- Fees: Higher than PPS (often 3–5%) because the operator now absorbs fee-market variance too.
- Transaction fees: Included. The pool estimates average fees over a window and bakes them into the per-share price.
- Best for: Large industrial farms with rigid cost structures and hedging requirements.
- Trade-off: The fee estimate can lag during volatile mempool periods. You may under-earn during fee spikes or over-earn during lulls.
- Examples: Foundry USA, Braiins Pool (historically), most large industrial pools.
PPLNS — Pay Per Last N Shares
Rewards are distributed only when the pool finds a block, proportional to shares submitted in the last N share window.
- Variance: High. You can submit shares for hours and earn nothing if no block is found.
- Fees: Lower (typically 0–2%) because the operator does not absorb variance.
- Transaction fees: Included naturally — when a block is found, the full reward (subsidy + fees) is split.
- Best for: Miners with stable operations who can weather dry spells.
- Trade-off: Pool-hopping is ineffective. If you leave during a dry spell and the pool finds a block shortly after, you earn nothing for your earlier shares.
- Examples: Slush Pool (original), many smaller pools.
TIDES — Transparent Income-Dividend Even-Share
Ocean.xyz's native schema. Combines pooled variance sharing with transparent accounting and optional solo/pooled hybrid modes.
- Variance: Moderate. You share in the pool's luck, but the accounting is fully transparent.
- Fees: Lower than PPS/FPPS. The operator takes a smaller cut because miners share variance.
- Transaction fees: Included and itemized. Every payout shows exactly how much came from subsidy vs. fees.
- Transparency: High. Full accounting of block rewards, fees, and share weights is published.
- Template control: Full via DATUM. You can submit your own block templates while still earning pooled rewards.
- Best for: Miners who want lower fees than FPPS but don't want to go fully solo.
- Trade-off: Requires trusting the pool's accounting (though it's auditable) and understanding the share-weighting formula.
- Examples: Ocean.xyz
Solo — No Pool
You mine directly against the network difficulty. If you find a block, you keep the entire reward. If you don't, you earn nothing.
- Variance: Extreme. For a single Bitaxe at ~733 GH/s, expected time-to-block is measured in centuries.
- Fees: Zero pool fees.
- Transaction fees: Full. You keep 100% of subsidy + fees.
- Template control: Full. You construct your own block template via your own node.
- Best for: Philosophical miners, lottery players, or those using Braiins Hashpower to rent hash for short solo bursts.
- Trade-off: Statistically, most solo miners never find a block. The expected value is identical to pooled mining (minus pool fees), but the distribution is wildly different.
- Examples: public-pool.io (coordinated solo), direct network mining with DATUM
Risk Transfer
| Schema | Who bears variance risk? | Who bears fee-market risk? |
|---|---|---|
| PPS | Pool operator | Pool operator (tx fees excluded) |
| FPPS | Pool operator | Pool operator |
| PPLNS | Miners collectively | Miners collectively |
| TIDES | Miners collectively | Miners collectively |
| Solo | Individual miner | Individual miner |
- PPS / FPPS: The pool operator must maintain reserves to cover payouts during unlucky streaks. If reserves run thin, payouts can be delayed or the pool can fail (see: 51% attacks on small PPS pools).
- PPLNS / TIDES / Solo: The miner bears the risk. The operator's incentive is to stay online and find blocks, not to maintain a massive reserve.
Choosing a Schema
| Situation | Recommended Schema | Rationale |
|---|---|---|
| Stable electricity, large farm, long time horizon | PPLNS or TIDES | Lower fees compound over time; you can weather variance |
| Unstable costs, small operation, need predictable income | FPPS | Smooth cash flow for covering fixed costs |
| Home miner with 1–2 Bitaxes | TIDES or Solo | TIDES for steady micro-rewards; Solo for lottery + full sovereignty |
| Renting hash for short bursts | Solo (via Braiins Hashpower) | 10,000 sats → ~2 hours of solo hash. Provably fair; full block reward if you hit. |
| Running your own node with DATUM | TIDES or Solo | Template control + pooled rewards, or full sovereignty |
| Privacy-focused, non-custodial payouts | TIDES | Lightning payouts via Bolt 12; no custodial balance held by pool |
Transparency Spectrum
| Schema | Accounting Visibility | Auditability |
|---|---|---|
| PPS | Low | Trust the operator's share price |
| FPPS | Low | Trust the operator's fee estimate |
| PPLNS | Medium | Share weights visible, but block reward allocation opaque |
| TIDES | High | Full block-by-block accounting published |
| Solo | Full | You validate your own blocks |
Related Pages
- Mining Payout Schemas — Concept-level overview with risk framework
- Ocean.xyz — TIDES and DATUM implementation
- public-pool.io — Pure solo mining coordination
- Braiins Hashpower — On-demand hash for solo or pooled mining
- DATUM — Protocol for template control while pooled
- BitAxe — Low-power hardware where fee optimization matters
- Home Mining — Context for residential mining economics
References
- Meetup #30: Decentralized Mining Workshop ^[raw/decentralized-mining-workshop-meetup-30.md]
- Ocean.xyz TIDES documentation ^[entities/ocean-xyz.md]
- Braiins Hashpower marketplace ^[entities/braiins-hashpower.md]