Thoughts on the Mempool Issue and Upgrading

Excellent question. I think the answer is “no”.

A Composer who uses the 2% minimum Composer fee to outbid his competition will win over the Composer who does not. So Composers will tend to use that minimum fee. In the limit of this tendency this is the space of strategies at play.

  • World 4: 2% minimum composer fee, the dominant block proposal is not yours and promises the guesser 125.44, and a transaction was broadcast paying 0.01 NPT in fees.
    • strategy A: idle. Gain: 0.
    • strategy B: produce a new proposal confirming only this transaction. Regardless of the Guesser split, the resulting proposal fails to outbid the currently dominant proposal, so no Guessers will adopt it. Gain: 0.
    • strategy C: produce a new proposal confirming this transaction and a transaction spending 2.56 from your own purse on fees. The new block proposal promises the guesser 125.445 NPT in fees which is more so the guessers adopt it. Gain: 0.005 NPT, and if you discount the cost of having some of those gained coins locked up for 3 years, the true gain is less than 0.005 NPT.

So it looks like this proposal gives Composers less incentive than World 1 (current situation) does for including transactions into block proposals when the Guesser fee has reached the maximum.

In my observation the main problem of the current incentives is that the dominant composer is incentivized to recompose multiple times during a block to overbid his competitors while completely ignoring mempool. The only way to be competitive while re-composing several time during a block is to mimic his behavior and to discard the mempool. I am not against re-composing, but I thinks doing so and overbidding competitors while not including any transactions is damaging for the network and should be penalized.

My proposal: Penalizing TX fee Downgrades.

While the shift toward a three-stage mining pipeline (with distinct roles for Upgraders, Composers, and Guessers) is promising, I believe it does not fully address the current incentives bringing us those empty blocks.

Nodes should consider rejecting composition proposals whose total fee contribution is lower than that of an earlier observed composition proposal for the same block height. Moreover, nodes propagating such “regressive” compositions could have their reputation locally downgraded.

This approach doesn’t require enforcing specific transaction content or changing the minimum merge requirement. Instead, it focuses purely on fee-based regressions, which can be objectively compared and used to guide propagation behavior.

This could be seen as a soft reputation mechanism rather than a consensus rule — but one that helps align incentives and encourages composers to improve on prior proposals, rather than undercut them with minimal merges and lower fees.

Would appreciate any thoughts on feasibility or unintended consequences of such an approach.

iiuc, so far in this thread discussion is focusing on incentive mechanisms to encourage composers to include mempool tx in block proposals. Which is fine and good, but let me ask a simple question: Is there some way we could modify the consensus rules to enforce that a minimum percentage of mempool tx are included in each block?

I can think of several reasons why that doesn’t seem to be workable, but I ask the question in case someone sees a way it can work.

I want to add a piece of context that made it click for me. Ignoring the mempool does not allow you to produce a composition faster[1], but it does allow you to start earlier. If the objective is to outbid as quickly as possible, it is worthwhile to sit on already-made proposals and only broadcast them when you need to. To do that, you need to make use of the opportunity for starting early.

The only information you have to go by is the fee on the one transaction in the block. I don’t know what you mean by total fee contribution but it sounds different (and hence unattainable).

You could make a distinction based on the number of inputs or outputs but the malicious Composer can always make dummy inputs and outputs so that does not help to distinguish good behavior from bad.

I doubt it. The consensus rules cannot distinguish inputs and outputs originating from genuine transactions from inptus and outputs originating from dummy transactions. And if the criterion used for distinguishing genuine from dummy is whether it was in the mempool, then you are solving the immediate problem by introducing a more profound one: how to establish consensus about what lives in “the” mempool?


  1. Or at least, I really don’t think so. Feel free to prove me wrong. ↩︎

Here is a suggestion that’s halfway in between @polto’s and @danda’s. Hat tip to @sword-smith.

Nodes prefer block proposals that confirm transactions in their (local) mempools. So for every incoming block proposal, the node computes a score measuring how well the block proposal absorbs transactions from the mempool. Block proposals that regress on this metric are ignored (and their senders punished). Block proposals that improve on this metric are relayed.

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Fees on the matched transactions in mempool might also be a relevant factor. Maybe zero-fee paying transactions that are in the mempool don’t add positive weight to a block proposal.

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:radioactive: Breaking News from a Composer Operator :radioactive:

Potential Composer:
“I heard Neptune needs more composers.”

Vault-Tec:
“Absolutely! Decentralization is very important.”

Potential Composer:
“Great! How do I participate?”

Vault-Tec:
“First, buy a powerful machine.”

Potential Composer:
“Done.”

Vault-Tec:
“Excellent.”

Potential Composer:
“Did I earn anything?”

Vault-Tec:
“No. You have to give it all to the guessers. :radioactive:”

Potential Composer:
“But why do I see somebody earning 64 NPT through composing?”

Vault-Tec:
“Pool. They have their own GPU composer.”


Composer Operator:
“So GPU composers are the future?”

Vault-Tec:
“No, no. Nobody said composers have a future.” :radioactive:


Potential Composer:
“Okay… so I can become a guesser instead?”

Vault-Tec:
“Oh no no.”

Potential Composer:
“Why not?”

Vault-Tec:
“You need to join a pool.”

Potential Composer:
“Why?”

Vault-Tec:
“Because solo guessing does not exist.”

Potential Composer:
“Oh… so then I earn rewards through the pool?”

Vault-Tec:
“No no.”

Potential Composer:
“No?”

Vault-Tec:
“You watch the pool earn rewards.” :grinning_face_with_smiling_eyes:


Potential Composer:
“There must be some way to make money from mining.”

Vault-Tec:
“Maybe in the future there will be GPU composers and GPU guessers.”

Potential Composer:
“Finally! Then I can earn something?”

Vault-Tec:
“Well…”

Potential Composer:
“Yes?”

Vault-Tec:
“We expect 128 NPT for guessers after 40 seconds instead of 2.5 minutes.”

Potential Composer:
“…”

Vault-Tec:
“Oki doki! :radioactive:”


:radioactive: Breaking News :radioactive:

After yet another round of awarding 128 NPT to guessers following 2.5 minutes of composing, the number of active composers has declined.

Fortunately, experts confirm that this is a very positive signal for decentralization.

The fewer composers remain, the more decentralized the surviving ones become.

Oki doki! :radioactive::grinning_face_with_smiling_eyes:


Jokes aside

I think the real question is not:

“Who can give more NPT to guessers?”

but:

“How do we encourage competition around producing the best proposal for the network?”

One possible direction could be to define some objective network-value function and allow the market to compete around proposal quality rather than primarily around fee escalation.

The exact metric is probably a separate discussion.

The important point is that proposal quality should matter.

Guessers should still be rewarded well.

Higher guesser rewards should still be possible.

But ideally fee wars would not become the dominant strategy.


I believe runtime set-guesser-fraction and recompose could help here.

The purpose of recompose is not to protect composer profits.

The purpose of recompose is to allow the market to converge toward the best proposal without forcing participants to discard accumulated mempool knowledge every time the fee market moves.

Today, changing guesser incentives often means abandoning an in-progress composition and starting over.

This may unintentionally reward fee escalation more than proposal quality.

With recompose a composer could:

  • observe a stronger proposal

  • update guesser fraction

  • recompose

  • preserve mempool visibility

  • continue improving the proposal

The composer with the best view of the economically valuable mempool should have a natural advantage because that proposal likely creates the most value for the network.


One final thought.

I fully understand that TIP-10 is the correct priority today.

However, once TIP-10 lands, I believe mining deserves another look.

The ecosystem is evolving rapidly:

  • public GPU guessers will likely appear

  • public GPU provers/composers may appear

  • hardware requirements will change

  • market structure will change

At that point fairness and decentralization become even more important.

Today, a significant part of the network’s guessing power appears to be concentrated in DRPool.

I am not suggesting anything improper is happening.

My point is simply that the broader community currently has no practical way to reproduce or verify the performance characteristics that lead to this dominance.

As a result, many participants are left trying to infer what is happening from market behavior alone.

This creates uncertainty.

In decentralized systems, trust is good, but reproducibility is better.

If public GPU guessers become available, independent composers could once again guess on their own proposals.

If public GPU provers/composers become available, competition may become significantly more transparent and reproducible.

That could be a major step toward both fairness and decentralization.

At that point we may discover that the current economics are perfectly fine.

Or we may discover that they need adjustment.

Either way, I think the discussion is worth having after TIP-10.

These are simply observations from someone running composer infrastructure and watching the market every day since February 2026.


:radioactive: Vault-Tec Research Department :radioactive:

“How do we improve decentralization?”

:cross_mark: Reward composers

:cross_mark: Encourage independent operators

:cross_mark: Sustainable mining economics

:cross_mark: Allow solo guessers

:white_check_mark: Everyone joins a pool

:white_check_mark: 128 NPT for guessers

:white_check_mark: Hope more composers appear

According to our latest simulations, decentralization reaches its theoretical maximum shortly after nobody wants to become a composer anymore.

Vault-Tec™ — Building a Better Future Underground Since 2077. :radioactive::grinning_face_with_smiling_eyes: