It appears that even though miners could pull more out of the blockchain by using multipliers, enough miners tend to be content enough to get less reward by accepting the 50 BTCV payout. This is actually good in that it strengthens the blockchain by finding blocks faster which makes a 51% attack harder. As I observe the Variable Block Rewards in action, it seems that the majority will form pools either going for x1 or x2 block rewards. There will always those trying to grab a large reward SOLO mining. It is the additional variation of pools and SOLO mining that actually makes BitcoinV a more decentralized version of Bitcoin.
We are Prohashing are mining at x1 because that is the only multiplier compatible with our mining software without code changes, and I suspect that's the reason most other pools are using x1 as well. We would love to mine at a higher multiplier, but the client has what we consider a bug - it returns the same difficulty target in getblocktemplate regardless of the multiplier; the difficulty should increase by the multiplier. Therefore, if we use another multiplier, we pay too much to customers. For example, with an x16 multiplier, the block reward increases by 16 but the difficulty doesn't increase, and we end up incorrectly paying 16x per share to miners.
If the client just increased the reported the difficulty by the multiplier, then it would be compatible with all existing pool software, including ours, and we could easily increase our multiplier. Otherwise, we would have to modify our pool software to support BitcoinV and deal with all the potential bugs that may introduce. I think the community of miners could be greatly expanded if that single change was made to the client. We have contacted the developer requesting this change, and he has said that what we consider a bug is actually a feature and that will not be changing this behavior. We disagree.
There still seems to be a bit of confusion on how the difficulty level works on BitcoinV. The difficulty is split into two areas:
1) The original Bitcoin difficulty level
2) Variable Block Reward difficulty level
When mining at x1, BitcoinV is the same as Bitcoin and the VBR difficultly adjustment does NOT kick in. When mining at x2 or larger, the VBR difficulty level kicks in. Changing what the GBT reports for difficulty would make a miner waste its power by trying to find a block with more zeros than is required. Once there have been enough leading zeros found in the hash (original Bitcoin difficulty level) then the VBR difficulty level kicks in where pattern matching of Merkle root with previous hash. Just a note, many pools are using greater than x1 and properly paying the rewards...