Bitcoin Standard Hashrate Token
Bitcoin Standard Hashrate Token (BTCST) (founded in 2021) is a Token collateralized by 0.1 TH/s of actual Bitcoin mining power standardized to an efficiency of 60 W/TH. Miners contribute mining power to the platform in exchange for newly issued BTCST[6][7].
BTCST is the native BEP-20 utility token of the platform. Holding BTCST is equivalent to owning the underlying mining power. Staking BTCST on-chain entitles staking users to receive mining rewards in Bitcoin.
All BTCST tokens other than the initial circulating supply of 1,000,000 are subject to a 25-week weekly linear vesting schedule[1][2].
Overview
Bitcoin Standard Hashrate Token (BTCST) brings liquidity to Bitcoin mining. Each BTCST is collateralized by 0.1 TH/s of real Bitcoin mining power. By staking BTCST, holders will receive daily Bitcoin distributions that correspond to the mining power staked.
BTCST creates an efficient market among Bitcoin miners. By trading BTCST, market participants can freely enter and exit Bitcoin mining exposure in any size, at any time, and with low costs. Miners without mining power tokenized by BTCST can also make use of the token to hedge against the risks of mining machine cost price fluctuations[8][9].
Bitcoin Standard Hashrate Token aims to bring exchange-grade liquidity to Bitcoin mining and solve the current problem of a limited number of exit options while participating in the mining process[3].
Team, Partners, and Governance
The program team consists of mining veterans with four years of experience constructing and managing mining sites in Yunnan, Sichuan, Xinjiang and Inner Mongolia provinces of China. Assets under the team’s management include those of some of the largest cloud mining providers in the world.
Founding partners of BTCST include institutional miners with more than 2000 PH/s of mining power under management. These founding partners and the partnering mining pool will form a governance board that collectively decides on material issues of the project, which include new issuances, cost level adjustments, surplus profit distribution and future features.
The governance board will have three seats upon launch, two of which to be occupied by the project team and one by the partnering mining pool.
Issuance
BTCST will, and can only be issued, when actual Bitcoin mining power has been contributed to or acquired by the project. Under the contribution program, a miner decides to contribute eligible mining power to the project in exchange for newly issued BTCSTs.
Because BTCST issuance is freely participable, any miner may contribute mining power to apply for standardization and tokenization as long as the miner can demonstrate that (i) the contributed mining power is owned free and clear, (ii) equipment generating the mining power is hosted in sites that have passed the program team’s risk assessment, and (iii) no fewer than 5 PH/s of mining power are contributed.
The standardization target of BTCST is 60 W/TH upon launch. Specifically, when eligible units of mining power are either contributed or acquired, they will be placed in a staging pool awaiting standardization. If the effective efficiency of all staged mining power is not 60 W/TH, the project will seek additional mining power with suitable efficiency to be either contributed or acquired so that the effective efficiency of the resultant blend of all staged mining power will reach target.
For example, if the staging pool has a total of 10 PH/s mining power with an off target effective efficiency of 75 W/TH, the project may choose to procure another 10 PH/s mining power with an effective efficiency of 45 W/TH to bring the overall effective efficiency of the staging pool to target.
When blending succeeds for a staging pool, the project will, with the consent of owners of staged mining power, move all staged units of mining power to the project’s tokenization pool and issue one BTCST for each 0.1 standardized unit of TH/s added to the tokenization pool. When blending fails, there will be no ownership transfer of the staged mining power and no token issuance.
By operation of token design, the total circulation of BTCST must at least generate the amount of mining power that all circulating tokens collectively represent. For example, if the blockchain shows 10,000 BTCSTs in circulation, the project must generate at least 1000 TH/s in Bitcoin mining power. A mining pool will partner with the project as an independent auditor and periodically publish reports to demonstrate mining reward sufficiency and to prove that BTCST is fully or over collateralized by mining power.
Token Allocation
| Token Name | BTCST |
|---|---|
| Binance Launchpool | 4.00% of the initial circulating supply |
| Initial Tokenizing Miner | 96.00% of the initial circulating supply |
Stake-to-Mine
BTCST claims mining rewards from the Bitcoin network centrally and distributes rewards to holders de-centrally. The project will partner with a reputable mining pool to claim mining rewards from the Bitcoin network. Namely, the project will direct all mining power collateralizing the token to the partnering mining pool in exchange for daily mining rewards as calculated and allocated by the pool. Centralization of this step is necessary to ensure feasibility and accountability: the mining pool will act as both a service provider and as an auditor that monitors mining power sufficiency. As it is customary, the project expects up to 10% of annual mining power downtime.
Once daily mining rewards arrive, a portion will be sold on the open market to cover the project’s daily energy and operational costs. The formula for determining the project’s daily costs, with the industry-standard power usage efficiency loss set at 3%, is
| Total Daily Costs (USD) | = 0.06 kW / TH | times |
|---|---|---|
| Mining Power (TH) | times | |
| 24 (h) | times | |
| Energy Cost (USD/kWh)1.03 | times |
Energy cost is currently at USD 0.058 / kWh. The execution price and amount of the daily sale will be audited and published by the project, as verifiable by the mining pool. Remaining mining rewards attributable to mining power representatively staked in the project’s DeFi (Decentralized Finance) yield farming dApp will be sent by the project and the mining pool jointly to the dApp and pooled there.
Holders stake BTCSTs in the dApp to yield farm Bitcoin. Namely, every BTCST staked continuously for a day (Singapore time) will increase the amount of Bitcoin that a staking holder is entitled to withdraw from the dApp by an amount equal to Bitcoin minable by 0.1 terahash of mining power on that specific day.
Namely, a holder of BTCSTs stakes 10 BTCST in the project dApp for a full day on day 1 (Singapore time). On day 2, the staking holder will be entitled to withdraw Bitcoin, as wrapped by the applicable blockchain, in an amount minable by one terahash of mining power on day 1. As with direct mining, the precise amount of Bitcoin minable by one terahash of mining power will vary daily as a result of changing network hashrate, difficulty, and Bitcoin price relative to energy costs.
The amount of Bitcoin the staking holder is entitled to withdraw will increase and accumulate in the dApp for each continuous day (Singapore time) of staking. Calculation and allocation of Bitcoin rewards are performed transparently by the dApp. The staking holder may withdraw mined Bitcoin at any time. The dApp supports both partial and complete withdrawals of Bitcoin rewards.
The example below explains mining rewards distribution in further details:
| Day 10.5 BTC | Day 20.6 BTC | Day 30.8 BTC | Day 40.9 BTC | Day 50.6 BTC |
|---|---|---|---|---|
| User A Staked BTCSTUser B Staked BTCST | +100+200 | -100, +100 | |||
|---|---|---|---|---|---|
| User A Daily Share User B Daily Share | 0%0% | 33% 67% | 50%50% | 33%67% | 33%67% |
| User A Mined BTCUser B Mined BTC | 0.00 0.00 | 0.00 0.00 | 0.200.40 | 0.60 0.80 | 0.901.10 |
Liquidity Premium Protection
To protect the premium against undue sell pressure, material issuances of BTCSTs must be approved by the project’s governance board. The project may freely issue on any given day BTCSTs representing up to 5 PH/s of mining power. For a daily issuance of BTCSTs representing more than 5 PH/s, the issuance must be unanimously approved by the project’s governance board, which includes a seat occupied by the partnering mining pool. In addition, and similar to how Grayscale Bitcoin Trust operates, newly issued BTCSTs are subject to a 25-week lock period. BTCSTs issued to the project itself are subject to the same lock period. The release schedule for locked tokens is linear and weekly[4].
Locked BTCSTs can be staked in the dApp and generate mining rewards for their owners. During staking, linear release continues to run as usual and the unique release schedule of each locked BTCST follows the token as it is staked into or unstaked from the dApp. The last-in-first-out method determines which BTCSTs are returned to a staking holder upon un-staking for the purpose of determining remaining release schedules.
MarketMaking
Each BTCST is collateralized by real mining power. Therefore, its fair market value can be determined by the discounted cashflow model. The price of BTCST in secondary trading should track that of Bitcoin and the token should be able to function as a leveraged Bitcoin token in an efficient market. Further, because BTCST does not depend upon financial derivatives, it is by design free from liquidation risk.
Roadmap
| Description | Year |
|---|---|
| Preparatory work for the project launch | Nov. 2020 |
| Proof-of-Concept Issuance: Up to 100p | Dec. 2020 |
| Batch 1 Issuance: Up to 1000p | Feb. 2021 |
| Self-owned mining sites acquisition and construction | Mar. 2021 |
| Batch 2 Issuance: Up to 1000p | Jun. 2021 |
Exchanges Listed
Bitcoin Standard Hashrate Token is currently available in[5]:
- Binance
- VCC Exchange
- WBF Exchange and
- PancakeSwap.
Partners
- Binance
- Token Pocket
- Math Wallet
- Safe Pal
- Genesis Mining
- Easy2Mine
- BTC.Top Mining Pool
- Atlas Mining