FiberPool: Leveraging Multiple Blockchains for Decentralized Pooled Mining

TL;DR

This paper addresses the instability of mining revenue and the centralization risk of traditional mining pools in Proof-of-Work blockchains. It proposes FiberPool, a tri-chain decentralized mining pool consisting of a main-chain smart contract, a storage chain for share-verification data, and a child chain to reduce withdrawal and usage fees, coupled with a period-based reward mechanism and probabilistic share verification (FiberPool Proportional). The authors demonstrate mining fairness, budget balance, reward stability, and incentive compatibility under FiberPool, showing resilience to pool hopping and cross-period strategies, and reduced verification costs via local verification and data sharing. The approach offers scalable decentralization with lower costs, leveraging Layer-2 techniques and structured periods to align incentives and improve practical deployment in real-world PoW networks.

Abstract

The security of blockchain systems based on Proof of Work relies on mining. However, mining suffers from unstable revenue, prompting many miners to form cooperative mining pools. Most existing mining pools operate in a centralized manner, which undermines the decentralization principle of blockchain. Distributed mining pools offer a practical solution to this problem. Well-known examples include P2Pool and SmartPool. However, P2Pool encounters scalability and security issues in its early stages. Similarly, SmartPool is not budget-balanced and imposes fees due to its heavy use of the smart contract. In this research, we present a distributed mining pool named FiberPool to address these challenges. FiberPool integrates a smart contract on the main chain, a storage chain for sharing data necessary for share verification, and a child chain to reduce fees associated with using and withdrawing block rewards. We validate the mining fairness, budget balance, reward stability, and incentive compatibility of the payment scheme FiberPool Proportional adopted by FiberPool.

Figures (4)

• Figure 1: Overview of P2Pool. Black arrows represent the reference structure of blocks, blue arrows represent the reference structure of shares, and red arrows indicate the distribution of rewards by the coinbase transaction. P2Pool is managed by a share chain with a shorter generation interval than the main chain. When a share on the share chain also functions as a block, the block reward is distributed over the past $N$ shares.
• Figure 2: Overview of mining in FiberPool. The red arrows indicate the distribution of block rewards: rewards from blocks generated in period $i$ are distributed to miners who mined in period $i-2$. The blue and orange arrows represent the submission and retrieving of data for share verification. After completing mining in period $i$, miners submit share verification data to the storage chain (blue arrows). Just before the start of period $i+2$, the system enters a Prepare phase (yellow box), during which each miner retrieves the share verification data from the storage chain and calculates the total PoW and its distribution for period $i$ (orange arrows). By using the storage chain, the total PoW and its distribution for period $i$ are shared among miners before period $i+2$ begins, and in period $i+2$, miners commit to these values as they proceed with mining.
• Figure 3: Block template for period $i$ in FiberPool. Before period $i$ begins, the total PoW and its distribution from period $i-2$ are shared through the storage chain. During period $i$, mining involves committing to the total PoW and its distribution from period $i-2$.
• Figure 4: Smart contract in FiberPool. Block rewards earned in period $i+2$ are linked to the total PoW and its distribution from period $i$.

Theorems & Definitions (8)

• Theorem 1
• proof
• Theorem 2
• proof
• Theorem 3
• proof
• Theorem 4
• proof