I published a new design https://radpool.xyz, for a decentralised mining pool where the miners are paid out using DLC contracts between Miner Service Providers (MSPs) and miners. The DLC contract attestations are published by a federation of MSPs using a FROST threshold signature.

The concern is that smaller miners will be uncomfortable that larger miners are in custody of their funds. In this post I point out that neither miners nor MSPs custody funds in the Radpool.

Miners Don’t Custody Other Miner’s Coins

Miner’s vote for an MSP by choosing to send their hashrate through an MSP to Radpool. In a way, the MSP is a syndicate for the MSP, and the MSP can change their syndicate by switching to a different MSP.

Each MSP represents a mix of miner interests. It is possible a miner starts an MSP simply to represent itself. Such an MSP could charge 0% fees to the miner and make sure the miner directly participates in the threshold signature.

In the end, miner’s can potentially be a direct participant in the threshold signature, however, miners don’t want the legal complications of building block templates and distributing block rewards.

Drake Block templates vs trade hashrate

Radpool Federation Doesn’t Custody Coins Either

The Radpool federation signs attestations to settle miner-MSP contracts, it does so because the federation won’t sign the coinbase unless DLC attestations are published at regular intervals.

A miner’s coins are locked in the DLC contract and released to the miner when the syndicate publishes an attestation. This period of contract duration is the time the coins are subject to the federation publishing an attestation. Once the attestation is published, the contract is immediately settled and the miners has full custody of the coins.

Radpool Custody

The state transition diagram shows the states that the MSP’s coins go through. It shows that the coins once paid out to Miner remain in it’s custody.