PROP vs PPS+

24.11.2023

To add new cryptocurrencies swiftly, Kryptex Pool introduced the new PROP payout system.
What exactly is PROP, and how does it differ from the standard PPS+?

Let's delve into a comparison of these two payout systems!

PROP. Proportional Payment System

PROP, derived from "Proportional," operates by rewarding miners in proportion to the shares they contribute to the pool to find a block.

Miners receive rewards based on their proportional contribution to the found block.

Advantages of PROP:

  1. Fairness. Rewards are distributed in alignment with the work performed. It's an equitable system where earnings correlate with individual contributions. More effort (more shares sent during the block period) results in higher rewards!
  2. Predictability. Payouts are relatively foreseeable for miners as they hinge on the shares they provide.
  3. Luck. Unlike PPS+, PROP miners earn more if the pool finds more blocks than anticipated over a certain period.

Disadvantages of PROP:

  1. Variability. Miners do not consistently find blocks at precisely defined intervals. The pool might discover blocks more frequently or less frequently than the average. As a result, miners receive compensation for their contributions upon finding a block, and the resulting reward is distributed among all participants.
  2. Luck. Since rewards depend on the mining blocks, the PROP system is susceptible to luck. More blocks found than expected mean higher rewards, while fewer blocks result in lower rewards.
  3. Waiting for Reward. Awaiting a reward for miners on pools with the PROP payout system is necessary. In this scenario, miners must be patient until the pool discovers a block. Miners distribute rewards for the submitted shares only after finding a block.

PROP reward calculation

prop_share_cost = block_reward * (miner_shares / pool_shares)

PPS+. Pay Per Share

PPS+, derived from "Pay Per Share," offers a fixed payment for each accepted share, regardless of whether the pool finds blocks.

PPS+ Benefits:

  1. Stable Income. Miners receive a consistent payout for each share, ensuring a more predictable income than PROP.
  2. Lack of Variability. Payments are stable, and miners don't have to wait for a block to receive a reward.
  3. Ease of Start and Stop. PPS+ is simpler for miners, as they don't need to wait for a block to receive rewards. Each share is paid, irrespective of block findings.

PPS+ Disadvantages:

  1. Risks for Pool Operator. PPS+ poses a greater risk for the pool operator, who must cover fixed payouts regardless of block discoveries.
  2. Constant 100% luck. Since luck doesn't influence PPS+, miners receive rewards precisely what they should, with no chance for additional rewards if blocks are found more frequently.

PPS reward calculation

pps_share_cost = block_reward * share_diff / net_diff

Why does Kryptex need PROP?

PROP and PPS+ differ primarily in a couple of sentences:

  • PROP: A fair and proportional payment system dependent on pool luck, paying miners based on their contribution to block discovery.
  • PPS+: Provides stable income per share but increases the risk for the pool operator. It does not allow miners to get a little more reward in case of high luck, but it also protects against reduced income in case of low luck.

By incorporating the PROP payout system, the pool can swiftly add new, potentially profitable coins with less risk than the PPS+ system.

Why do miners need PROP?

  1. Swift Addition of New Coins: With a PROP payout system, pools can quickly add new coins without risk, allowing miners to switch to more profitable options.
  2. Chance to Earn More with Luck: Miners have the potential to increase their profits with a higher number of blocks. Kryptex allows you to earn even more if luck is on your side.

So which is more profitable?

  • PPS+: Provides exact payment for each share with no failures or losses but lacks the potential for increased earnings. Easy to start, easy to quit.
  • PROP: Rewards miners in proportion to their contribution to block discovery. Successful periods yield higher rewards, but bad luck can impact income. Consistent mining is crucial for significant rewards.

There's no definitive answer; each system has its pros and cons. Over the long term, rewards are similar, with differences influenced by block distribution luck.

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