The Loka Mining project has launched a new decentralized protocol equipped with an institutional mining pool to mine Bitcoin.
The new pool, inaugurated in collaboration with Hashlabs, will help miners overcome the post-halving crisis period, potentially bringing new liquidity to the market.
The partnership will also leverage renewable energy to power the production of hashrate.
Let’s see all the details below.
Loka launches a new institutional and ecological Bitcoin mining pool in collaboration with Hashlabs
Loka Mining has just launched a new institutional Bitcoin mining pool service istituzionale in partnership with the company Hashlabs.
The intent is to launch a permissionless protocol open to everyone, in which the miners can gain access to the buying and selling of Bitcoin at discounted prices.
Through “forward hashrate” contracts, mining pool participants can sell their computing power in advance to institutional clients.
By doing so, cryptocurrency miners can take advantage of a hedging tool capable of bringing liquidity in advance for their cryptographic businesses.
As reported by Loka, these contracts will be overcollateralized at 110% and tokenized for immediate liquidity in secondary markets, offering a safe and guaranteed speculation vehicle.
Andy Fajar Handika, founder of Loka, reported the following during the presentation of the new state-of-the-art Bitcoin mining pool:
“We have seen enormous interest from larger investors looking for better ways to access Bitcoin and, thanks to the provision of hashrate and access to Hashlabs miners, we are providing that, without any counterparty risk. This protocol provides non-custodial and trust-minimized access to Bitcoin that rewards miners for the work they do by providing a necessary service for the network.”
It is worth noting that all operations will be powered by renewable energy offered by provider Hashlabs, which currently operates in Ethiopia, Finland, and Russia.
This provider controls a computational power of 500 petahash, corresponding to 0.08% of the total mining capacity of the Bitcoin network.
The new mining pool protocol, as mentioned by the group, will help reduce the environmental impact in the Bitcoin block production process.
We remind that among the investors of Loka who have supported the project we find VC such as BTC Startup Lab, Dfinity Foundation, Outlier Ventures, and Kilonova Ventures.
A solution to the liquidity crisis of miners
As mentioned, the new mining pool by Loka is mainly designed to help miners cope with the liquidity crisis post halving of Bitcoin.
In fact, the recent halving of the block reward has led to a sharp decline in the revenues of this sector.
This, combined with the uncertain price action of Bitcoin, has contributed to creating a shortage of liquidity among the less industrial miners. Without this, the mining operators cannot ensure the continuity of operations and risk the capitulation of their infrastructures.
Thanks to the collaboration between Loka and Hashlabs, miners can take advantage of the mining pool to sell their future extraction shares to institutional investors, obtaining valuable liquidity in advance.
In short, it is a more convenient way to access Bitcoin futures, using the network’s hashrate as the central resource.
Alen Makhmetov, co-founder of Hashlabs, is enthusiastic about the innovation introduced in the cryptographic industry, emphasizing his environmental commitment:
“We are proud to bring more liquidity to DeFi through a mining pool that offers investors the much-needed access to Bitcoin futures. Equally important, we are able to provide this service by supporting the most sustainable ways of mining Bitcoin worldwide. By ensuring the financial health of miners, we are simultaneously improving the environmental well-being of Bitcoin”.
Payments for those who provide computing power through the mining pool will be processed using ckBTC, a resource based on Chain Fusion technology by ICP.
By doing so, money will not be wasted on gas fees, which is fundamental in this cryptographic process, and the coupons will be more substantial.
In particular, Chain Fusion allows smart contracts to read and write on the Bitcoin blockchain. Loka can thus verify mining contributions and manage all rewards transparently
The value of ckBTC is proportional 1:1 with that of BTC, collateralized 100% with coins held in the Bitcoin mainnet.
Revenue delle mining pool e i costi di estrazione di Bitcoin
The new institutional mining pool service from Loka represents a godsend for some miners who are currently mining Bitcoin at a loss.
Immediately after the April halving, the revenue of the network security personnel more than halved. In fact, on average their daily earnings went from 73 to 30 million dollars (block reward + fees).
These are, however, difficulties well known to miners, who every 4 years find themselves having to endure for a few months until the situation stabilizes.
It is worth noting how obviously a large part of the revenue trend depends on the more or less favorable price of Bitcoin.
Source: https://www.blockchain.com/explorer/charts/miners-revenue
At the moment the cost of mining 1 Bitcoin for the mining pools is 67,800 dollars according to MacroMicro data. This figure takes into account an estimate of energy costs and the mining power of the hardware.
Since the price of each Bitcoin is 65,250 dollars, this means that the miners are mining at a loss unless they have super efficient machinery.
As already mentioned, this situation will soon be resolved while the miners are currently looking for liquidity to keep their business going.
The mining of Bitcoin is in fact a “self-regulated market”: in unfavorable mining conditions, sooner or later the price of BTC will increase or some miners will turn off their machines. Indicatively, in a few weeks/months, the production of Bitcoin should return to guarantee a profit to the miners.
In the meantime, the mining pool of Loka offers a hedging tool to ensure cash flow in case of liquidity difficulties.
Source:https://en.macromicro.me/charts/29435/bitcoin-production-total-cost
