Key Points
- Loka, a decentralized Bitcoin mining pool, collaborates with Hashlabs to provide miners with immediate liquidity.
- The partnership aims to target the $10 billion Bitcoin mining industry through a renewable energy-based DeFi model.
Loka, a decentralized Bitcoin mining pool, has joined forces with Hashlabs, a sustainable energy mining provider. This collaboration will allow Bitcoin miners to gain instant liquidity through a novel protocol.
Hashlabs operates in Ethiopia, Finland, and Kazakhstan. The alliance enables Loka to introduce a protocol that doesn’t require permissions, through which miners can sell future mining rewards.
Targeting the Lucrative Bitcoin Mining Market
Currently, the Bitcoin mining industry is worth $10 billion. Loka is seeking to penetrate this market with a DeFi model that uses renewable energy sources to lessen financial risks linked to price fluctuations. This strategy is also expected to increase market liquidity, given that miners hold around 10% of the Bitcoin supply, roughly equivalent to $50 billion.
The protocol will present contracts that are overcollateralized at 110%. These will be tokenized to enable immediate access to liquidity in secondary markets. This will permit miners dealing with reduced mining revenues after halving to manage liquidity while hedging against market volatility.
The new renewable energy mining pool is specifically targeting institutional investors. It will offer Bitcoin hashrate contracts at discounted rates, directly from renewable energy miners.
Supporting Sustainable Bitcoin Mining
Andy Fajar Handika, the founder of Loka Mining, stated that they have seen significant interest from larger investors seeking better ways to access Bitcoin. Thanks to Hashlabs’ supply of hashrate and access to miners, they can provide that with no counterparty risk.
Alen Makhmetov, Hashlabs co-founder, views the new protocol as a crucial step in supporting sustainable Bitcoin mining. It also plays a vital role in protecting miners’ financial health, which Hashlabs will back through sustainable and low-cost energy solutions. The company controls approximately 500 petahashes, or 0.08% of the total hashrate on the Bitcoin network.
Loka’s protocol will provide a non-custodial and trust-minimized environment. Miners will receive payouts, and investors will gain liquidity through Chain-key Bitcoin (ckBTC).
Chain-key Bitcoin (ckBTC) is a token that is backed 1:1 by Bitcoin held entirely on the Bitcoin mainnet. Unlike traditional wrapped tokens, ckBTC does not depend on centralized bridges for conversion to Bitcoin. Instead, it leverages the Internet Computer’s Chain Fusion to facilitate direct interaction with the Bitcoin network.
With Chain Fusion, Loka can use smart contracts to authenticate mining contributions and manage rewards.
