Five major Bitcoin (BTC) mining companies have partnered with crypto firm Standard Hashrate Group to tokenize their hashrate.
According to a Jan. 25 announcement, Bitcoin mining companies Atlas Mining, BTC.TOP, Easy2Mine, Genesis Mining and Hengjia all partnered with Standard Hashrate Group.
Standard Hashrate Group’s tokenized hashrate token launched on Binance’s Launchpool on Jan. 8 and as of press time is trading on the exchange at a price of nearly $68, with each token being collateralized by 0.1 terahash per second of Bitcoin mining power.
The goal, Binance said at BTCST’s launch, is to “create an efficient market for Bitcoin’s mining power in ways similar to how Grayscale Bitcoin Trust creates institutional liquidity for Bitcoin.”
The second-largest mining pool, Poolin, launched a similar token, pBTC35A, earlier this month. That token, which also represents 0.1 terahash per second, is $96.05 on CoinGecko at press time.
According to a mining profitability calculator by CryptoCompare, the hashrate of a single BTCST token could generate 0.0002206 BTC in a year if the mining difficulty and hashrate were to stay the same as they are now. This amount of Bitcoin is currently worth about $7.40.
It would take nearly 10 years of mining at the blockchain’s current conditions to pay off the $68 that each token is currently priced at.
Together, the five firms will tokenize a total of 25 petahash/second of hashpower into Bitcoin Standard Hashrate Tokens (BTCST). Standard Hashrate Group’s CEO Alex Zhao said that the initiative brings mining to the decentralized finance (DeFi).
“Atlas Mining, BTC.TOP, Easy2Mine, Genesis Mining and Hengjia form a diverse and powerful group to join as BTCST’s new batch of tokenization miners,” said Binance CEO Changpeng “CZ” Zhao. “They share SHG’s vision of bringing exchange-level liquidity to mining power and bridging real-world mining to the DeFi world.”
Atlas Mining CEO Tony Ma said that he believes this initiative links the mining industry to the DeFi space, since it allows token-holders to “earn real BTC via crypto-native staking.”
If Standard Hashrate Group is to be considered a DeFi project backed by Binance, then it is in good company.
As Modern Consensus reported at the end of October, at the time Binance announced that it will fund the development of five DeFi projects that make use of its Binance Smart Chain—which also hosts Standard Hashrate Group’s system.
What’s more, those were not even the first such projects financed by the exchange, which already funded six more. Binance is looking for more projects to funds, having set aside a hefty sum—$100 million—just to finance DeFi projects that leverage its smart contract-enabled blockchain.