Miner Centralization

SIP Ideas + Discussion
147

Hi all, following up on my recent mining report, and this entire thread discussion, I have done some additional analysis on 3 suggested avenues for improving mining decentralization.

The TL;DR is that there are no quick fixes for everything. In the short term, Dust Mining can increase the total number of miners and (hopefully) over time some dust miners will convert into “full” miners as they get more comfortable with mining. In the mid term, counting a small portion of gas fees towards VRF (10%-30%), however this would likely have to be accompanied with other changes to STX mining to not introduce additional risks. In the long term, the only fix I currently see is non-custodial mining pools.

Here is a summary with links to full analysis reports for those interested.

  1. Dust Mining - @muneeb
    Mechanism of Action: Reduce the capital requirements to mine
    Expected Additional Miners: ~30
    Advantages: Increases the number of miners, promotes more active mining community, and provides an “on-ramp” for people to get comfortable with mining first
    Disadvantages: Does not contribute to vrf commits (so no increase to miners required for 51% attack), and slightly reduces stacking rewards and/or increases STX inflation in short term
    Full report: Dust Mining Analysis - Google Docs

  2. Minimum X% Gas Fees - @shea256
    Mechanism of Action: Level the profit margin between large and small miners
    Expected Additional Miners: <1
    Advantages: For existing miners, makes smaller miners better able to compete with larger miners
    Disadvantages: Does nothing to overcome the large capital requirements to start mining in the first place, and as such is expected to have very little actual impact to attracting new miners
    Minimum Gas Fee SIP Analysis - Google Docs

  3. Count X% of Gas Fees Towards VRF
    Mechanism of Action: Reduce the capital requirements to mine
    Expected Additional Miners: ??
    Advantages: Reduces the initial capital required to mine in a similar way to dust mining
    Disadvantages: If too much % gas goes to VRF, and/or a BTC miner gets too much % of BTC hash power, BTC miners can mine STX for much more cheaply than other miners (since they refunded what they spend on gas in blocks they win), reducing stacking yields and potentially reducing total number of miners
    Count Gas Fees to VRF SIP Analysis - Google Docs

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