PPS+ VS PPLNS: How Should Miners Choose the Best Payment Method?
Today, the majority of miners in PoW projects that support ASIC mining rig prefer to mine through mining pools such as Foundry USA, AntPool, or ViaBTC. The introduction of ASIC mining rigs has significantly boosted the overall network’s hashrate. However, for miners with only a few mining devices, the chances of finding a block on their own are quite low.
Mining pools aggregate the hashrate of miners from all over the world, creating a powerful collective that makes it easier to solve hashing puzzles and mine multiple blocks in a short period. The rewards from these mined blocks are distributed among all participating miners in the mining pool.
In some cases, miners may connect 10 mining rigs to the mining pool, while others may only connect 1. But how can this unequal contribution be fairly distributed in terms of mining rewards within the pool?
To ensure fair distribution of miners’ rewards, various payment models have emerged in the market since the inception of the first mining pool in 2010. Currently, the mainstream payment models can be categorized into 5 types: PPS, PPS+, PPLNS, FPPS, and SOLO. Among these, PPS+ and PPLNS are the most commonly used payment models.
What is PPS+ (Pay Per Share+)?
PPS+ is an improved version of the traditional PPS payment model, introduced by ViaBTC Pool in August 2016. In addition to the PPS model, PPS+ also includes the allocation of transaction fees. Under this model, coinbase rewards are distributed based on the PPS payment model, while transaction fees are distributed based on the PPLNS payment model.
In a mining pool, a share represents a possible solution to a hashing problem that miners submit to the pool as proof of their contribution. The hashrate of a mining rig indicates the number of possible solutions it can generate per second. For example, a mining rig with a hashrate of 200 TH/s can submit two quadrillion shares per second. Under the PPS payment model, miners receive rewards for each share they submit, regardless of whether the pool successfully mines a block.
Furthermore, under the PPS+ payment model, additional transaction fees are allocated based on the transaction fees included in the blocks mined by the pool according to the PPLNS.
The stability and predictability of this payment model are its core features. Regardless of fluctuations in the pool’s luck, miners can enjoy consistent mining income.
What is PPLNS (Pay Per Last N Shares)?
PPLNS is a payment model that considers the most recent N shares. Miners’ earnings depend on the valid shares they contribute when the pool successfully mines a block.
Mining pools do not calculate earnings immediately when miners submit possible solutions (shares). Instead, after receiving every N shares, they calculate the total rewards obtained by the pool from mining blocks during that period (including coinbase rewards and transaction fee rewards). Then, based on the proportion of shares submitted by each miner within those N shares, the rewards for that period are distributed.
For example, let’s say a pool successfully mines a block after receiving N=200,000 shares. At this point, the pool calculates the proportion of each participant’s shares within the last N shares. If Miner A contributed 200 shares out of those 200,000 shares, Miner A would receive a portion of the Coinbase reward as follows: 3.125 × 200 / 200,000 = 0.003125 BTC (excluding any fees deducted by the pool). Simultaneously, the transaction fees generated by this block would also be distributed based on Miner A’s share contribution.
Compared to PPS+, the PPLNS payment model is more volatile, with mining rewards for miners potentially being either high or low.
ViaBTC’s KAS mining pool now supports the PPS+ payment model
How to Choose the Best Payment Model?
Regardless of which mining pool a miner decides to join, they must choose the payment model before their mining rig starts operating. So, how do you choose the most suitable payment model? The key is to understand the advantages and disadvantages of each model. Here’s a summary:
For miners who prioritize stable income:
If you value income stability and predictability, PPS+ might be the better choice. PPS+ provides a continuous fixed return, which is suitable for miners who are not willing to take significant risks.
For miners willing to take risks for higher returns:
If you can tolerate income fluctuations and are seeking higher potential returns through mining, then PPLNS may be more suitable for you. PPLNS can yield higher rewards when blocks are successfully mined, making it suitable for miners who are willing to commit long-term and have confidence in the mining pool.
Major mining pools and their associated payment models for mainstream cryptocurrencies:
The selected entities are: AntPool, ViaBTC, F2Pool, Binance Pool, and EMCDPool.
ViaBTC has recently implemented the PPS+ payment model in the KAS mining pool, providing KAS miners who join ViaBTC Pool with the option to select PPS+ as their payment mode.
About ViaBTC:
Founded in May 2016, ViaBTC has provided professional, efficient, safe, and stable crypto mining services to over one million users in 130+ countries/regions worldwide. With a cumulative mining output value of tens of billions of dollars, this world-leading mining pool offers services for more than ten mainstream cryptocurrencies, including BTC, LTC, and KAS. Backed by one-stop services covering ViaBTC Pool, CoinEx Exchange, and CoinEx Wallet, ViaBTC aims to provide global users with more supporting tools, stable and efficient mining services, and a better product experience.
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