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Foresight Ventures: What kind of projects can get support from miners?

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Miners like projects with native tokens on the first layer, projects with a high proportion of mining in the token model, and projects with proportional computing power and revenue.

Original Title: "Foresight Ventures: How Projects Gain Miner Support from a Miner's Perspective?"

Original Source: Maggie, Foresight Ventures

TL;DR

In the field of encryption, miners are a powerful group. I interviewed several large mining companies and summarized how this group views blockchain projects. If you are a project party, you can learn how to get the support of miners. This article will answer you from the following four questions.

1. What is the current situation of miners' livelihoods?

2. What is the economic model that miners like?

3. Miners like to know the benefits of the project. How much power do miners have?

4. What kind of projects need to focus on miners' interests? How to attract them to participate?

一、矿工的生存情况如何？

Translation:

1. How is the survival situation of miners?

1.1 Mining power declines, returning to traditional industries for server leasing and a small amount of idle capacity.

Since last year, the market has not been good and mining profits have been low, with many projects using graphics card machines. Many miners choose to sell their mining machines or return to traditional industries to use them for server rentals, renting them out for graphic rendering, cloud servers, and more.

·In November, the situation began to turn around, and some miners reorganized their computing power to mine in the mining circle.

1.2 They are all low-end graphics cards, and there are basically no high-end graphics cards. Even if there are, they are not used for mining.

·Graphics card prices have risen sharply, and renting or reselling high-end cards can make money immediately. Miners are unwilling to invest in the unknown field of mining.

·The ban on graphics cards in the United States, the popularity of AI, has led to a shortage of graphics cards and price increases.

·3090 graphics cards have gone from costing a few thousand yuan per card to costing ten thousand yuan per card.

·4090 graphics card, 1W yuan two months ago, now 2W yuan.

·The graphics cards in the mining industry may not have high-end configurations. There is a large quantity of low-end graphics cards such as 3080, P106, 1080, and 2080 that are idle.

Currently, some companies in Shenzhen are expanding the use of low-end graphics cards through soldering methods, allowing them to run algorithms with higher requirements.

·Some companies have made software improvements to AI algorithms, allowing these algorithms to run on low-end graphics cards such as the 3080.

·Filecoin mining machines with 3090 graphics cards are hard to find. Most Filecoin mining machines were purchased between 2020 and 2021, when the 3080 graphics card was already very good. Later, profits declined and people stopped investing. Therefore, most Filecoin mining machines have 3080 graphics cards.

二、什么是矿工喜欢的经济模型？

2. What is the economic model that miners like?

First of all, as long as the project's profits are high enough, miners are willing to come and mine. Then, miners will choose the economic model they like.

2.1 Miners prefer economic models like BTC/Filecoin

1.Is a layer with native tokens.

2. Stacking computing power can earn more profits, miners with 11% of computing power can earn that proportion of block rewards.

3. Projects with a high proportion of block rewards in the economic model, such as Filecoin where 60-70% of the coins are block rewards. If the proportion is not high, the miner's willingness will be low.

2.2 Miners don't like current PoS, ETH L2, etc.

·Most of the ETH L2 block production is controlled by the project parties, and miners cannot participate. Even if they do participate, it is only as part of the project party's computing power.

·Currently, L2 only wants to achieve decentralization of zk prover, while Sequencer is still far from decentralization. Miners here only collect a small amount of computational fees, and the capture of fees is not in the hands of miners. They are working for the project party and lack interest.

·The economic models of these projects are not well-liked. The projects design Tokenomics in a way that squeezes miners, who only earn a small amount of transaction fees and have limited profit margins. As a result, miners are not very interested. In these projects, miners are just followers, and the success or failure of the project depends mainly on the project party, capital party, market conditions, etc., and miners have no say.

·Some L2 projects have already issued tokens, but it is difficult to incentivize miners when building decentralized sequencers/zk provers in the future, which is not friendly to mining businesses.