mining pools – How does Ocean’s TIDES payout scheme work?

Ocean’s TIDES (Transparent Index of Distinct Extended Shares) is a unique payout scheme designed to offer fairer and more transparent rewards to miners compared to traditional methods like PPLNS or FPPS. Here’s a breakdown of how it works:

Key Concepts:

Proof Period: A defined window of time (e.g., 8 blocks) used to calculate payouts.
Distinct Extended Shares (DES): Each miner’s contribution during the proof period, weighted by the time their shares were submitted.
Proof Period Funds: The total block reward (including transaction fees) for the proof period.
Weighted Percentage: Miner’s share of DES compared to the total DES across all miners in the pool.
Alice’s Case (Constant Contribution):

DES Accumulation: If Alice contributes 20% of shares consistently, her DES will constantly increase throughout the proof period.
Payout: At the end of the proof period, the proof period funds are distributed based on each miner’s weighted percentage of DES. Since Alice contributed 20% of shares, she will receive approximately 20% of the pool’s rewards for that period.
Frequency: This process repeats for each proof period (e.g., every 8 blocks), ensuring Alice receives consistent payouts based on her continuous contribution.
Bob’s Case (Single Block Contribution):

DES: Since Bob only contributes to one block (30% share), his DES will be significantly lower than Alice’s who contributes consistently.
Payout: At the end of the proof period, Bob will receive a payout based on his weighted percentage of DES, which in this case is 30% of the block he contributed to. He will not receive any further payouts for that proof period since he didn’t contribute further.
Future: If Bob rejoins the pool and starts contributing again, his DES will begin accumulating, and he will be eligible for payouts based on his new contributions.
Advantages of TIDES:

Transparency: Payouts are directly linked to contributed hashrate, offering clear visibility into earnings.
Fairness: Avoids “luck-based” rewards like PPLNS and ensures consistent payouts for sustained contributions.
No Custodial Fees: Eliminates the need for the pool to hold miners’ funds, reducing potential risks and fees.
Important Notes:

The actual payout amounts can vary depending on the total hashrate of the pool and the number of miners contributing.
Shares might not translate directly to hashrate due to potential stale shares or different reward calculations for solo mining.
TIDES aims to be fair and accurate but may have trade-offs in terms of payout frequency compared to other schemes.