Liquidity provider GSR is introducing derivative products to help crypto mining companies hedge their risks against price volatility after partnering with Interhash, a mining services startup backed by Canaan Creative.
The companies announced on Friday that a new set of derivatives contracts, including swaps, would help miners manage their risks when running operations in 2020, including the upcoming bitcoin halving.
The new products are expected to launch next month, though a specific date was not provided.
According to a press release, some $3 billion in bitcoin is expected to be mined next year at current price levels.
Rich Rosenblum, GSR co-founder, told CoinDesk that the companies were specifically offering two products: "a tailored risk management solution for miners," which provides an average-priced option or swap contract, and a new type of futures contract that trades based on hashrate.
Hash rate can be delivered physically by using mining equipment as collateral for the contract, he said as one example.
In a follow-up email, a spokesperson added that hashes which correspond to bitcoin-producing blocks could also be delivered, allowing the recipient to claim the mining reward.
GSR would look to third-party data providers to detail what the actual hash rate on the bitcoin network or a difficulty derivative would be.
"We already have some of these new products ready but the second is in a test phase and a work in progress," he said.
In a statement, GSR co-founder Cristian Gil said the factors miners must consider include price, mining equipment costs, electricity costs and mining difficulty, but at present companies do not hedge "Against adverse price action."
GSR Partners With Canaan-Backed Startup to Offer Crypto Miners Derivatives
gepubliceerd op Dec 20, 2019
by Coindesk | gepubliceerd op Coinage
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