The attractiveness of the computing power mining market
Since the birth of Bitcoin, mining has been one of the most important parts of the encryption field. Whether it is the computing power mining of Bitcoin and Ethereum, or the emerging PoS pledge mining, or the liquidity mining of DeFi, mining is a key mode that supports the continuous operation of the encryption field.
Mining is not only important, but also the most obvious and most important part of the entire encryption field to generate revenue. According to the current BTC rewards of 6.25 per block, assuming the price is calculated at US$18,000, one year’s mining revenue can be close to US$6 billion; while ETH is calculated based on the current new volume and the price is calculated at US$550. One year’s mining The income is about 2.7 billion US dollars; according to the current release of tokens, Filcoin releases about 121.8 million in the first year. Assuming the FIL price is 30 US dollars, the annual mining income is about 3.6 billion US dollars. The overall annual revenue of the above three mining markets exceeds 11 billion U.S. dollars.
Of course, taking into account the price factor and the release factor of additional issuance, the overall annual income will increase or decrease according to market changes. Even so, judging from the current scale, we can feel the magnitude of the computing power mining market, which is extremely attractive.
The problem of cloud mining
The computing power mining market is very attractive, so many ordinary users hope to have the opportunity to participate in the encrypted mining industry, but not everyone has the opportunity to participate.
- The threshold for individual mining is too high
For most ordinary crypto users, the era of individual mining has completely passed. The biggest expense of mining costs is electricity, and it is difficult for retail investors to obtain cheap electricity, it is difficult to enter professional custody sites, and it also requires professionals to maintain the operation of the machines. Once you want to participate in mining, a series of questions follow one after another: Which tokens are more profitable to participate in mining? How to switch the mining revenue? What mining machine to buy? Where to buy? Where to go for hosting? and many more.
The encrypted mining industry is already a specialized industry. Under the current circumstances, although many individuals want to participate in encrypted mining services, it is basically difficult to have the opportunity to participate.
Since individual users buy mining machines by themselves and hand them over to mining operators (mines) for operation, it is not suitable for the vast majority of ordinary users. The mining industry has developed a "cloud computing power" model, and the mining farm calculates its overall The computing power is then divided into multiple shares, and users can buy in according to the shares. When distributing income, users can get corresponding income according to their own share ratio.
This model sounds very good, and it does solve the problems of users' complicated operations (such as purchasing mining machines, hosting, operation and maintenance, etc.), but as time goes by, it also has some problems, which hinder its further development. development of:
- Cloud mining is not transparent
Since individual users buy the computing power of a centralized miner, how users know the real computing power of the miner and how to get the actual computing power percentage of the purchased share can only rely on the trust of the miner. This will lead to opacity of subsequent computing power gains and may cause losses to participants.
If the income is not transparent, it is only a partial loss of income. The more serious problem is that the mining machine and computing power cannot be paid after the user pays, which will cause more serious personal losses. In addition, most ordinary users may not have a very accurate understanding of cloud computing power, and may be misled by concepts. For example, it will confuse Filcoin's cloud space and effective storage computing power. Users may purchase "cloud space" instead of generating revenue. The "effective storage of computing power". This will also cause losses to users.
- Cloud computing power lacks liquidity
The current "cloud computing power" is often purchased from a certain miner. If users have turnover needs, it is difficult to transfer. They can only be traded and transferred under the same miner, and the operation process is troublesome, while the transfer is performed across miners. It's almost impossible.
- The utilization rate of cloud computing power is not high
After buying the share of "cloud computing power", users can only wait for mining profits, and can no longer use their assets to participate in other financial activities, and their capital utilization rate is not high.
Decentralized computing power mining market
As mentioned above, if everyone wants to participate in mining, we must first solve the mining threshold, transparency, liquidity and other issues. So, is there any way to solve it?
Since computing power mining serves the encryption field, the encryption field also provides potential solutions for the changes in the computing power mining market. One of the most important ideas is the decentralized model. The decentralized model can reshape the "cloud computing power" mining market through smart contracts, DAO governance, NFT, etc.
This is what DMEX is trying to do. It hopes to reshape the mining market through a decentralized model and solve the current opacity and poor liquidity of the "cloud computing power" market.
DMEX's decentralized computing power mining market
DMEX is Decentralized Mining Exchange in English, which means a decentralized cloud computing power mining trading market. DMEX wants to build a cloud computing power market where ordinary users can participate, with transparent revenue, and liquidity. To achieve this, decentralization is its important means. In other words, it no longer relies on the trust of third-party institutions to build the cloud computing power mining market, but instead uses technical means to realize people's mining of cloud computing power. Trust in the mining market, thereby expanding the scale of the market.
In the design idea of DMEX, there are several keywords: NFT, DAO and DeFi. These points are the basis for building the DMEX decentralized cloud computing power mining market. Specifically, the effective computing power on the DMEX platform is represented by NFT, and different NFTs represent different effective computing power. With NFT, you can obtain the corresponding mining revenue; at the same time, NFT can also be transferred and traded to realize the liquidity of cloud computing power. In order to issue NFT computing power products, the participation of community DAOs is also required, which does not rely on centralized institutions, thereby solving the problem of trust and transparency. Finally, NFT itself can participate in DeFi activities such as lending, mining, mutual insurance, etc., to obtain greater benefits.
(DMEX's overall process framework, Source: DMEX)
In terms of process, DMEX is a cloud computing power mining service market, and the computing power corresponding to NFT comes from miners. In order to issue its computing power NFT, miners need to first apply to the DMEX platform, and the application needs to be reviewed by community voting. In addition to community review, in order to ensure the interests of computing power NFT buyers, miners also need to pledge the DMEX platform Token DMC. After the computing power NFT is generated, ordinary users who wish to participate in computing power mining can make purchases on the market. After users buy NFT, they can get the benefits of computing power mining, and can also participate in DeFi activities, such as lending, mining, mutual insurance, etc.
(The technical framework implemented by DMEX, Source: DMEX)
Specifically, how is DMEX's computing power NFT generated? How does it ensure that the NFT corresponds to the actual computing power? How does computing power NFT participate in DeFi activities?
DMEX's NFT
Users familiar with the encryption field basically know NFT. NFT is a non-homogeneous token, which is relative to a homogenous token. Homogeneous tokens are interchangeable. For example, your 1 ETH is the same as someone else’s 1 ETH. It has the same value and can be swapped. NFTs are not interchangeable, because each NFT has different attributes and unique identifiers. Just like two paintings, Zhang Daqian's paintings and Picasso's paintings are not interchangeable.
Why doesn't DMEX use homogenized tokens to represent the tokens issued by miners on the DMEX market? This is mainly because in the DMEX market, each cloud computing power sold is different. Each cloud computing power has the following different attributes: node information of different computing power providers, computing power validity period, effective computing power, corresponding mining revenue, etc. These different attributes are represented by NFT, which can facilitate their subsequent transactions in the market and participation in DeFi and other activities.
By turning the computing power into NFT, it is equivalent to the on-chain of computing power assets. Once the assets are on the chain, there can be a record of real and unalterable commitments, and at the same time, it can greatly accelerate the liquidity of assets. This transparency and liquidity will stimulate more Many people participate in the field of cloud computing power mining, because this is conducive to improving the efficiency of capital.
The computing power NFT traded on the DMEX platform is provided by miners. These computing power needs to be reviewed by the community before generating NFT, that is, DMEX introduces the mechanism of community DAO. If the vote is not passed, the miner cannot generate its computing power NFT. If the vote is passed, the miner also needs to pledge the corresponding required DMC tokens (DMEX platform tokens) in order to generate the computing power NFT. The computing power NFT has attributes such as the miner, the validity period of the computing power, the number of effective computing power, and the income.
(NFTization of computing power is the basis of the DMEX model, Source: DMEX)
After the computing power NFT is generated, it can be sold in the DMEX cloud computing power market in two ways: fixed price sales or auction sales. Ordinary users who buy a certain computing power NFT can view their NFT computing power-related information through the wallet, including the miner, validity period, effective computing power, etc., and users are most concerned about the mining revenue (passed daily The wallet automatically gets mining income).
Since computing power is NFT, it can also be transferred. For example, some users have turnover needs, then users can transfer their NFT on the platform. The various attributes of the NFT are clear and transparent.
To sum up, once the computing power is turned into NFT, this means that the threshold for users to participate in computing power mining is reduced to the lowest level, and the corresponding mining income can be obtained by only purchasing NFT. In addition, the NFTization of computing power also solves liquidity and other issues.
(With the computing power NFT, the circulation of cloud computing power can be realized, Source: DMEX)
DAO of DMEX
NFTization of computing power solves the issues of computing power issuance, trading, and liquidity, but how to ensure that computing power corresponds to its NFT? This is the most difficult part of off-chain assets on the chain.
DMEX adopts three schemes before and after the event to ensure the value of the computing power NFT itself. Before the hashrate NFT is generated, miners need to submit the information issued by the hashrate NFT to the DMEX community. The information includes the company or individual's real information, total hashrate, effective hashrate, expected revenue, etc. The community adopts DAO governance and is held by DMC Coin holders vote to determine whether the miner can generate the corresponding computing power NFT.
(DAO governance guarantees the value of cloud computing power NFT, Source: DMEX)
After the miner generates the cloud computing power NFT, it is equivalent to making a promise on the chain, and must pay the mining income to the user who purchases the NFT in accordance with the corresponding promise. What if the miner withdraws the computing power after issuing the computing power NFT? How to guarantee the value of computing power NFT?
After the hashrate NFT is sold, DMEX uses capital risk control contracts to ensure the cashing of hashrate income. DMEX has a capital risk control contract. This contract releases users' funds to purchase NFT on an average day basis according to the NFT period. That is to say, miners will not get users' funds to buy computing power NFT at one time to prevent violations. Commitment; At the same time, miners also use a certain NFT computing power as the basis to distribute mining revenue to users daily. If the miner does not distribute the mining revenue to the user in accordance with the contract, or the mining revenue is lower than the market average by more than 20%, the community can vote to terminate the release of contract funds to the miner and return the unreleased funds to the user.
The advantage of using smart contracts to release the purchase of NFT funds and the release of mining revenue is to ensure the effectiveness of the computing power NFT as much as possible, because it is not a one-time release of the user’s purchase of NFT funds to the miners, if the miners do not follow the calculations The force NFT stipulates the release of the corresponding revenue, which can minimize the user's loss, and the user can also get the corresponding mining revenue every day, which can also increase the user's confidence.
DAO governance can also set up mutual insurance. Community DAO can manage mutual insurance funds. At present, DMEX plans to use 10% of its total DMC tokens as funds for the mutual insurance fund pool. With the development of time, all relevant stakeholders in the DAO community can also set a ratio and inject More funds go to the insurance pool. If an extreme event (such as an earthquake, etc.) occurs in the miner, the computing power cannot correspond to the value of the NFT. At this time, the holder of the computing power NFT can be compensated through the mutual insurance pool.
DAO governance is not accomplished overnight. Community members, as long as they hold DMEX's platform token DMC, have the opportunity to participate in governance. According to DMEX's plan, its DAO governance is carried out in stages.
In the early stage of DMEX launch, first select 7 representatives from the DMEX team and consultants to launch the DMEX platform, which is managed through a multi-signature wallet. All early proposals have 4 votes or more in favor of adjustments.
After the DMEX platform is launched, DMEX will initiate community DAO governance. The community can re-elect the manager of the multi-signature wallet, and the DAO of the community can initiate proposals and vote on various matters of DMEX. Issues governed by voting include but are not limited to: computing power NFT generation qualification review; computing power NFT generation channel fee adjustment; computing power NFT transaction rate adjustment; computing power NFT lending and other DeFi rate adjustments; risk control contract suspension of funds Release (miners have not issued profits for 7 days; mining profits are lower than 20% of the market average for 7 consecutive days); miners fail to perform and cause heavy losses to users, initiate insurance compensation, etc.
DMEX's DeFi
DMEX is the trading market for cloud computing power NFT, so what does it have to do with DeFi? Once cloud computing power becomes NFT, it means that it is a liquid asset. It has the opportunity to participate in DeFi activities. DMEX started with Filecoin's computing power market in the early stage, and plans to cut into the computing power market such as Bitcoin and Ethereum in the future.