DMND and RootstockLabs Integrate Stratum V2 for Merge-Mining to Boost Bitcoin Decentralization

DMND and RootstockLabs have announced a new feature rollout designed to further decentralize Bitcoin mining. The integration of Stratum V2 enables miners at the pool to engage in their own block template construction while also handling the selection and inclusion of merge-mined block commitments from the Rootstock (RSK) sidechain.

How Merge-Mining Works

Merge-mining allows multiple blockchains to share the same Proof-of-Work (POW) from a single set of miners. The child chain structures its block headers to include the headers of the parent chain. Specifically, the hash of the child chain’s block header is embedded within a parent chain block, typically in the coinbase transaction. Software for the child chain validates portions of the parent chain’s blocks during the verification of its own blocks.

This process enables miners of the parent chain to mine multiple blockchains simultaneously by including blockheader commitments in their coinbase transaction. When a block is found for the parent chain, it is also found for all child chains. The DMND integration allows miners to claim sidechain rewards in sBTC—Rootstock’s bitcoin-backed token, whose reserves are managed by the federation operating the sidechain—directly on the sidechain without revenue sharing or intermediary pool custody.

Potential Impact on Decentralization

While there is potential for this integration to have an unintended centralizing effect, it remains a significant development that will test such dynamics in real-world conditions.

Alejandro De La Torre, CEO and Co-Founder of DMND, stated: “The miner controls the merge mining and the miner gets paid for the merge mining. More delegation of control to miners is our key support for further decentralisation of the Bitcoin ecosystem.”

This initiative underscores the ongoing efforts to enhance the Bitcoin network’s decentralization through innovative mining practices.