Babel Finance Bitcoin mining companies are allowing their machines to be set up as loan collateral so that the payer can provide them with better terms.
The loan-to-value ratio (LTV) for these loans is 30%, in part because the borrower keeps the freshly mined crypto until the borrower pays back. LTVT is usually significantly cheaper than the 160% Babel charge, which means recipients need to keep য়ে 1.6 million in bitcoin to get US 1 1 million.
Diggers in a bull market are constantly increasing their ways of being isolated with mined cryptocurrencies. These loans help miners cut costs such as paying electricity bills or buying new equipment when leaving low BTC or ETH.
“For miners, their biggest asset is their machines,” said Le Tong, managing director of financial services Babel. “After the price dropped on March 12, they wanted to keep the coins as much as possible. Keeping their machines as a mortgage is a better way for them to get bitcoin versus loans. ”
The service was launched in June 2020 and has since accumulated 22 million in machine-back.
To provide the service, Babel has teamed up with the world’s largest ETH mining pool Spark Pool; One of the largest BTC mining pools, the F2 pool; And bitcoin mining firm operators Hashej and Heng Zia Group.
Machine-supported loans now account for about 5% of the company’s total debt.
Tobe said Babel Finance’s primary customers are miners, and the donors are helping Chinese miners compete with Western companies that continue to buy machines in competitive markets, Tong said. These new buyers have increased demand but supply is low due to the shortage of computing chips that manufacturers use to make machines.
Mining farms operate while holding machines as parallels to Babylon and keep the mining cryptocurrency that pays nder; Tong said it allows Babel to collect the full value of the loan even if the price of the machine is devalued during a market crash.
“Normally it would be six terms for six months,” Tong said. “When they provide the terms, we will release the coins mined by the machines.”
The machines from Babel Mining Farms and Pools double check the output coming from each machine and monitor it daily. Ton said ten secondhand machine dealers who work with regular mining machine buyers also pay for the machines by looking at the computing power of the mining network and the price of the cryptocurrency.
In the future, nder donors want to allow machines to use their machines to protect them from the risks of investing in cryptocurrencies.
“It’s pretty complicated,” Tong said without elaborating, but added that hedge miners would be protected from losing their profits from a market crash.