BTCST tokenization is freely participable — any eligible miner may contribute mining power to enjoy the liquidity that tokenization brings. In this post, we discuss the protocols of Bitcoin hashrate tokenization at BTCST, a process designed to balance the needs of ensuring stable hashrate delivery while promoting decentralized BTCST issuance.
Governance of the Tokenization Process
- The tokenization process is governed by the project governance board. The governance board will have three (3) seats upon launch, two of which to be occupied by the project team and one by the designated auditor (Binance Pool is the designated mining pool auditor for BTCST on Binance Smart Chain).
- All material (5 PH/s and up) acceptance and rejection of Bitcoin hashrate tokenization must be unanimously approved by the governance board. Other tokenization must be approved by a simple majority of the governance board.
Steps of Tokenization
- Step 1 — Tokenization Application: A miner intending to apply for tokenization of Bitcoin mining power should email tokenization@1-b.tc to schedule an initial screening call. On the call, a project representative will determine whether in-situ tokenization, where the miner’s mining machines stay running at its current site or send-in tokenization, where the miner should physically send its mining machines to a BTCST Eligible Mining Facility, is appropriate.
- Step 2 — Evaluation and Decisioning: For in-situ tokenization, the current hosting facility must be, or become, a BTCST Eligible Mining Facility. For send-in tokenization, the machines themselves must meet the project’s tokenization standards. See “Standards of Evaluating Mining Facilities” and “Standards of Evaluating Mining Machines” below for details.
- Step 3 — Assets Transfer: Once certain machines are approved for tokenization, a formal contract will be entered between the project and the contributing miner to evidence ownership transfer of the machines.
- Step 4 — Token Issuance: Upon completion of machine ownership transfer, BTCST will issue tokens to the contributing miner that correspond to the number of standard units of Bitcoin hashrate the machines can generate.
Standards for Evaluating Mining Facilities
- Eligibility: At present, only a mining facility with 100+ PH/s of Bitcoin mining power applying for BTCST tokenization has the opportunity to become an Eligible Mining Facility, where the project’s mining machines may be hosted.
- Evaluation Location: The project team will dispatch a due diligence team to conduct an on-site evaluation of an applying mining facility.
- Evaluation Method: Each mining facility will be evaluated for Environmental Factors, Infrastructural Factors, Power Source Factors, Operations Factors, and Legal Factors, and receive, for each category, a score of 1 (poor), 2 (fair), or 3 (good).
- Evaluation of Results: A mining facility will be deemed to have passed evaluation if it does not receive 1 (poor) from any category and receives 8+ overall.
Standards for Evaluating Mining Machines
- Eligibility: At present, only the following models are eligible for tokenization by BTCST. No less than 5 PH/s of hashrate should be contributed to each tokenization application.
1. Bitmain: S9k，S9j，S9i, T17, S17, S17 Pro, T19, S19, and S19 Pro;
2. Innosilicon: T2T and T3+;
3. WhatsMiner: M10, M21s, M20s, M31s, and M30s;
4. AvalonMiner: A1146, 1066, 1166, 1166 Pro, and A1246.- Evaluation Location: Mining machines to be contributed for tokenization should be physically delivered to an Eligible Mining Facility for hot testing.
- Evaluation Method: Mining machines subject to evaluation will undergo a hot test as if they were formally deployed. The hot test will last for 8 hours. At the end of the test, the average power consumption rate and average Bitcoin hashrate generated for the 8-hour period will be logged.
- Evaluation of Results: Mining machines will be deemed to have passed evaluation if the average power consumption rate and average Bitcoin hashrate of the evaluated machines are within 5% of their respective models’ designed rates.
