Muktol

+1
[[Viridian Longbow]] and [[Sorcerer's Wand]] would be the quipment equivalent to [[Psionic Gift]] / [[Hermetic Study]] while [[Thornbite Staff]] would turn this into a mass-removal (as long as you have enough mana).

I really love [[Order of the Stars]] because it stops anything without trample, that isn't an artifact or colourless, your opponent can throw at you for only 1 mana.

+1
[[Leatherback Baloth]], [[Wilt-Leaf Cavaliers]], [[Strangleroot Geist]], [[Doubling Chant]]
[[Nacatl War-Pride]] ...When he attacks you get X tokens that are copies of Nacatl War-Pride, this includes the mana-costs! So each creature that your opponent controls, when you attack, increases your devotion by 3.
[[Utopia Sprawl]] ...Helps to speed up your play a little bit.

[[Doorkeeper]] could also be worth a look

I'm sorry to disappoint you but [[Sundial of the Infinite]] doesn't stop you from having to discard down to your maximum number of allowed cards:

https://gatherer.wizards.com/pages/card/Details.aspx?multiverseid=228118
Ending the turn this way means the following things happen in order: 1) All spells and abilities on the stack are exiled. This includes spells and abilities that can't be countered. 2) All attacking and blocking creatures are removed from combat. 3) State-based actions are checked. No player gets priority, and no triggered abilities are put onto the stack. 4) The current phase and/or step ends. The game skips straight to the cleanup step. The cleanup step happens in its entirety.

From the Comprehensive Rules (April 17, 2020—Ikoria: Lair of Behemoths)
514. Cleanup Step
514.1. First, if the active player’s hand contains more cards than their maximum hand size (normally seven), they discard enough cards to reduce their hand size to that number. This turn-based action doesn’t use the stack.

If you want avoid that cards with "You have no maximum hand size" would be the way to do it:
[[Finale of Revelation]], [[Folio of Fancies]], [[Graceful Adept]], [[Kruphix, God of Horizons]], [[Nezahal, Primal Tide]], [[Praetor's Counsel]], [[Reliquary Tower]], [[Spellbook]], [[The Magic Mirror]]

[[Jace's Erasure]] only mills 1 per 1 drawn card.
With a black-splash you could think about adding [[Pilfered Plans]] and [[Balustrade Spy]]

I left the damage from [[Jace's Phantasm]] out of the equation because 90% or more modern deck should (and will) have some sort of removal to deal with threats. With some protection or some control-spells you can counter these, but without, the Phantasm will hit the board....and hit the graveyard immediate after. Especially if your opponent see's that you're running mill as "diversion" or concentrate on a dual-strategy. :)
A card that just came to my mind to help you with [[Fraying Sanity]] when you don't have any mill-spells on your hand would be [[Nephalia Drownyard]], tough that requires blue and black mana. But a quick search found [[Ipnu Rivulet]], which could fit into here.

I would at least include some counterspells to protect [[Jace's Phantasm]] and control your opponents play. The real problem I'm seeing here is that you don't have enough burn-spells to end the game this way: You have a total of 16 burn spells that will deal 3 damage = 48 damage total, if you manage to draw them all. Mill looks better, especially if you manage to play [[Startled Awake]] a few times.
Personally I would swap [[Jace's Erasure]] for [[Fraying Sanity]]. Yes, [[Fraying Sanity]] doesn't help your plan if you don't manage to mill some cards per turn, but it doubles the potency of all your mill-spells.

+1
Some suggestions, even if this is only built from cards lying around (Perhaps you happen to have some of these):
[[Roiling Terrain]] could be a viable win-con. My own LD deck used [[Inferno Titan]] and [[Stormbreath Dragon]]. With all those instant/ sorcery's, creatures that benefit from spells cast could also be an option: [[Stormchaser Mage]], [[Mercurial Geists]], [[Kiln Fiend]], [[Nivix Cyclops]], [[Wee Dragonauts]]
[[Uncovered Clues]] instead of [[Divination]]/ [[Index]].
[[Past in Flames]]

There are some good options for inventory-lists. Personally I use urza-gatherer, you can use it on your smartphone and PC (Windows via browser). There are also some internet-portals that allow you to enter your card-collection, the best-known would be deckbox.org

[[Cranial Plating]] is banned in pauper.

For me, this looks like a [[Barrage of Expendables]] deck. [[Sling-Gang Lieutenant]] is a better and worse [[Barrage of Expendables]]. Better because you don't have to pay mana to deal damage and yo gain life, worse, because he's a creature that can get removed easier than an enchantment. Either play him 4 times or cut him for Barrage.
[[Goblin Warchief]] could be traded for e.g. [[Goblin Chieftain]].
Personally I would remove [[Skirk Prospector]] for a simple reason: You don't need mass-mana here and you don't need acceleration on cost of your ammunition.
[[Mogg War Marshal]], [[Boggart Birth Rite]], [[Cauldron Haze]] are some other suggestions.

+1
Why only 40 cards?
[[Arms Dealer]] and [[Massive Raid]] provide goblins wit a good way to deal with enemy creatures or with your opponent directly.
Personally I would remove [[Hulking Devil]] and [[Hyena Pack]] for e.g. [[Dragon Fodder]] or [[Krenko's Command]]. If you want to make your deck even more aggressive and mass-based then [[Raid Bombardment]] could be worth a look.
[[Searing Spear]] (or any cc2 mana/ 3 damage spell) instead of [[Precision Bolt]]

+1
[[Grand Architect]] or [[Vedalken Engineer]] could also speed up your play a little bit.
[[Perpetual Timepiece]] could also be an idea as you can search it with [[Tribute Mage]] and it prevents you from having no cards to draw. Nothing more frustrating than [[Blood Artist]] being the last 3 cards and thus you can't finish your opponent.

Personally I would rather use [[Gideon's Company]] (or [[Leonin Warleader]]) instead of [[Palace Guard]].
Like SeriousPaul mentioned, I would definitely switch [[Suture Priest]] for [[Authority of the Consuls]]. You don't loose any offensive because you gain life when your opponent puts a creature on the battlefield, thus strengthening yourself and [[Ajani's Pridemate]]. You also prefent your opponent from blocking with this creature, making your deck even more aggressive.
[[Armored Ascension]] seems a little bit of an overkill in this deck to me. Using [[Cobbled Wings]] or [[Angelic Gift]] (/[[Call to Serve]], [[Gryff's Boon]], or any other cheap card that provides a creature with fyling)

+1
I would include something (at last in the sideboard) to be able to interact directly with your opponent: [[Bone Splinters]], [[Smallpox]] or [[Tragic Slip]] are some good candidates.
[[Evolving Wilds]], or its more expensive variants like [[Verdant Catacombs]], [[Bloodstained Mire]] and so on, can be used to trigger your [[Bloodghast]] more often.
[[Cauldron Haze]] can be a nasty surprise for your opponent when [[Grave Pact]] is on the field or when he tries to remove one of your creatures. [[Undying Evil]] would only target a single creature but provide it with a +1/+1 counter instead of -1/-1 counters for all.
Last, [[Undercity Informer]] can convert your deck from draining an opponent to death to milling him, also maybe a sideboard option.

Greetings
Muktol

Personally I would try to reduce the diversity of your creatures a little bit. Normally Merfolk tries to be rather fast so I would try to concentrate on the 1-3 mana mana creatures/ cards. Also cards like [[Mist-Cloaked Herald]] or [[Stonybrook Banneret]] could be trated for some (more) lords like [[Lord of Atlantis]], [[Master of the Pearl Trident]], [[Merfolk Sovereign]] or [[Merrow Reejerey]].
Last I would remove [[Counterspell]] for something modern legal like [[Mana Leak]] as you might someday take this deck to a local (modern) match and can't because of one card.

Greetings
Muktol

+1
With [[Wild Defiance]] only at 0.86$ average (I nearly choked my lunch seeing this) I would use it 4 times in this deck.
I'm no big fan of [[Epic Confrontation]] and the "fight" mechanic. Domri's Ambush or [[Rabid Bite]] are more to my liking because your creature is safe from your opponents damage. [[Wild Defiance]] lessens this risk but why take it anyway when there are alternatives?
I have used [[Markov Blademaster]] in my vampire deck, but this deck ha a whole ton (nearly 40% of it's cards) of removal and made sure you could actually reach your opponent with the Blademaster. Without proper support it's an expensive 1/1 with double strike that gets killed way to easily. You could replace it with [[Prophetic Flamespeaker]] or [[Storm Fleet Swashbuckler]].

+1
What about adding some imprison-enchantments like [[Baffling End]] (or [[On Thin Ice]] with some snowlands)? this way you can interact with threats your opponent puts on the field.

+1
As this is a rather specialised strategy I would add a description of how to use the colour-change and karma ability to the "how to play" section.
You will run into some problems against multi-coloured deck because they only play as few basic lands as are needed and rely on special lands (like you do) to give them the proper mana when needed. Your only option here is to shut one colour down with [[Swirl the Mists]], so I would up the number of this to 4.