Stratum V2 Upgrade Unlocks Direct Merge-Mining Rewards for Bitcoin Miners

Bitcoin miners can now directly claim merge-mining rewards from the Rootstock (RSK) sidechain without intermediaries, thanks to a new integration by DMND and RootstockLabs. The partnership brings Stratum V2 support to merge-mining, a move aimed at decentralizing control over block template construction.

Under the new setup, miners using DMND's pool can construct their own block templates while simultaneously handling merge-mined block commitments from RSK. This means they keep 100% of the sidechain rewards in rBTC, the bitcoin-backed token managed by Rootstock's federation.

Background

Merge-mining allows a parent blockchain (like Bitcoin) to share its proof-of-work with one or more child blockchains. The child chain embeds its block header into the parent chain's coinbase transaction.

When a miner finds a block on the parent chain, it automatically finds a block for all child chains being merge-mined. This technique has been used by sidechains such as RSK for years.

Until now, miners at pools often had to rely on pool operators to handle sidechain commitments. DMND's integration gives miners direct control over which merge-mined blocks to include and how to claim rewards.

What This Means

Alejandro De La Torre, CEO and Co-Founder of DMND, emphasized the decentralization benefit: "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."

While the change could theoretically centralize power if only a few pools adopt it, the move puts real-world pressure on the ecosystem to prove that merge-mining can be made more permissionless. Miners can now earn additional revenue directly on the RSK sidechain without sharing with a pool or trusting a third party for custody.

This development is especially significant as the Bitcoin community debates the trade-offs between pool centralization and miner autonomy. Stratum V2, the protocol upgrade enabling custom block templates, is seen as a crucial step toward restoring miner independence.

The partnership between DMND and RootstockLabs demonstrates that merge-mining can be integrated with Stratum V2 in a way that returns control to individual miners. Whether this leads to greater decentralization or unintended consequences remains to be seen, but the experiment is now live.

For miners interested in participating, DMND's pool supports the new feature immediately. RootstockLabs continues to develop tools to make sidechain integration seamless.