As of today, there are already several defi protocols developed on Stacks, layer 2 built on top of bitcoin. Therefore, its recently proposed a mining model. The new mining model, according to reports, will help increase Stacks (STX) mining throughput. Also, the mining model could help increase the number of miners on Stacks.
The previous Stacks (STX) mining model is subpar. Therefore, resulting in low numbers of miners interested in mining and a generally low mining throughput. However, the new model, developed by Ryan Shea, will help propound a reliable working solution to this issue. In this article, you will discover more about the latest stacks’ mining model.
General Overview of The Previous Mining Model
Stack’s previous mining model is flawed. The model design uses a fixed cost for bidding. This, in turn, can only support a small number of miners. The model is also the most lucrative to huge miners.
On the other hand, small miners usually have very inconsequential rewards from mining, so most of them are not mining at all. So, it isn’t that there is a shortage of willing miners, they only “[…] drop out because it’s only profitable to be the largest.”
Therefore, to solve this issue, Ryan Shea is proposing that miners “Bid to Mine”.
Glad to have you writing again buddy and would love to see it more😉
Highly recommend this read and would love more conversation from the community
We need more intense debate on these issueshttps://t.co/rGev4CAoI8
— trevor.btc (@TO) May 29, 2022
The New Stacks Mining Model
According to Ryan, the key to the model is for miners to send only BTC transactions after winning the transactions round. This is because sending only BTC reduces the number of transactions per winning round. This, in turn, will redirect profit from large miners.
The new model requires miners to “Bid to Mine” while posting $STX as collateral. The winner of the round posts the transaction as BTC. Therefore making sure transaction fees do not go beyond the winner’s block.
Moreover, members of the Stacks community have shown a great deal of support for the proposal. Managing Partner at Stacks, Owen Trevor further expounded on the proposal. According to him, the new mining model could result in 7% fewer rewards. That is a drop from 10% APY to 9.7% APY.
However, this is not an issue, as APYs can simply be increased by doubling block rewards. Also, the new mining model will to a large extent completely eliminate inflation on Stacks.
About Stacks And STX Price
At the time of writing, STX was trading at $0.5511 with a market cap of $581 million and a 24-hour trading volume of $22,3 million. The token price is also down by 4.3% in the last 24 hours.
⬆️For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.
⬆️Find the most undervalued gems, up-to-date research, and NFT buys with Altcoin Buzz Access. Join us for $99 per month now.