As hashprice hovers around all-time lows, miners are evaluating ASIC fleet refresh and expansion programs to improve efficiency, decrease hashcost, and increase margins. At Luxor, we have the tools available to help miners finance ASIC purchases using their existing hashrate. Here’s how it works.

Luxor Pool Pays Upfront for Hashrate

As the only Bitcoin mining pool with forward market functionality, Luxor Pool miners can sell forward a portion of their hashrate for upfront funds. Rather than selling Bitcoin from treasury, taking on high interest financing, or issuing additional equity, Bitcoin miners can leverage Luxor’s Deliverable Hashrate Forwards to sell their future hashrate production and receive upfront capital.

In exchange for upfront payment, miners have two delivery options: fixed hashrate or fixed Bitcoin repayment.

Fixed hashrate repayment refers to the delivery of a specific quantity of Bitcoin mining hashrate to Luxor Pool, for a specific amount of time, in exchange for upfront payment. This is otherwise known as selling a Deliverable Forward (DF) contract. 

The upfront capital amount Luxor will pay the miner is known as the “notional” value of the hashrate – i.e., Contract Execution Hashprice x Daily Hashrate x Contract Duration in # Days – less a margin requirement of 18% on the position. With each day that rolls off the contract, excess margin is returned to the miner after a daily mark-to-market. Luxor collects margin to protect against fluctuations in hashprice and ensure market integrity. 

A fixed hashrate delivery locks the miner into a certain hashprice, enabling a hedged position throughout the contract term. This option may be favorable for miners looking to reduce revenue volatility or to express a relatively bearish opinion on future hashprice.

Fixed Bitcoin repayment refers to the delivery of a specific quantity of Bitcoin through your hashrate on Luxor Pool, for a specific amount of time, in exchange for upfront payment. This is otherwise known as selling a Deliverable Forward (DF) contract and buying a Non-Deliverable Forward (NDF) contract. 

The upfront capital amount Luxor will pay the miner is known as the “deliverable notional” value of the hashrate – i.e., Contract Execution Hashprice x Daily Hashrate x Contract Duration in # Days – less the realized loss on the spread between the Deliverable Forward (DF) and Non-deliverable Forward (NDF) contracts. The Deliverable Forward (DF) tends to trade at a discount to the Non-deliverable Forward (NDF) market because it entails upfront payment. Since launching almost one year ago, the market-determined annualized spread between the DF & NDF (i.e., the realized loss or cost of capital) has decreased from 18-21% to 10-13% in favor of miners.

A fixed Bitcoin delivery locks the miner into a certain BTC amount, enabling a leveraged position throughout the contract term. This option may be favorable for miners looking to express a relatively bullish opinion on future hashprice, i.e., an upward trend over time. 

To be eligible for forward payment, miners must move to Luxor Pool for a minimum of 30 days, post margin, and complete credit profiling procedures and due diligence requirements with the Luxor Derivatives Desk.

After completing onboarding and executing contracts, just hash like you normally would to Luxor Pool. All settlements and mark-to-markets happen automatically in your Luxor Pool account. 

Luxor ASIC Desk Finances ASIC Purchase

Once the hashrate forward sale is finalized, upfront funds are available for the miner to use. Luxor’s ASIC Brokerage helps miners of all sizes reinvest those funds with access to exclusive deals. Currently, we’re offering:

• 4,000+ New S21 Pro 234T units at $17.80/TH (EXW Asia)
• 2,000+ Used S19j Pro+ 117/120T units at $4.05/TH ( EXW USA)
• 3,500+ Used S19j Pro 100T avg. units at $2.05/TH (EXW USA)
• 3,000+ Used S19 90T avg. units at $1.55/TH (EXW USA)

At Luxor, we have the tools and markets to help meet your production targets. Reach out today to secure your machines and put your upfront funds to work!

Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, investment, financial, or other advice. Nothing contained in our content constitutes a solicitation, recommendation, endorsement, or offer by Luxor or any of Luxor’s employees to buy or sell any derivatives or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the derivatives laws of such jurisdiction.