Original author: Jack, Kaori, BlockBeats
Original editor: Jack, Violin, BlockBeats
Recently, due to the continuous rise of Kaspa token KAS, the PoW concept has become another hot topic after the Bitcoin ecological concept, and the mining currency sector has become a recurring word in many community discussions. But in addition to the boost from Bitcoin-related concepts and market conditions, the sudden rise of the PoW concept does not seem to be accidental. Behind the KAS Myth, there seems to be a hidden Myth Mining Coin Production Line unknown to the mainstream market.
KAS Flywheel
On November 7, 2021, the Kaspa mainnet built on the GhostDAG protocol was officially launched. It uses the BlockDAG architecture to solve scalability issues related to traditional blockchain operations. The KAS mining algorithm is kHeavyHash, which supports GPU single mining or dual mining with ETHW and ETC, and supports mining with some FPGA and ASIC mining machines. According to F 2 Pool data, the current computing power of KASs entire network is 60.97 PH/s, and its 24-hour output revenue reaches US$1.5267 million.
Kaspas economic model is similar to Bitcoins issuance mechanism. There is no pre-mining or pre-sale, and all tokens can only be obtained through mining. The total supply of its token KAS is 28.7 billion, which is expected to be mined within 186 months, and the circulation will be basically released in April 2037.
On November 16 this year, Binance officially announced that it would launch the KAS 1-50 times U-based perpetual contract at 10:00 on November 17. According to CoinGecko data, as of the time of writing, the PoW public chain Kaspa token KAS exceeded US$0.13 and is now quoted at US$0.134, with a 24-hour increase of 18.3% and a price increase of 37.40% in the past 7 days.
KAS price trend; source:CoinGecko
The increase in the currency price of KAS can be traced back to the listing of TxBit at the end of May 2022. At that time, the price of KAS was as low as US$0.0002. In September of the same year, KAS was listed on MEXC, and the price soon soared to US$0.008.
By April 2023, the price of KAS hit a record high of $0.039, an increase of more than 1850% in less than a year. During that month, KASs trading volume continued to increase, fluctuating between US$15 million and US$40 million every day, and even exceeded US$500 million at one time. During the period, the trading platforms with the largest trading volume of KAS were: MEXC Global, TxBit, Gate.io and Coinexcom.
In May, Glacier and Bitmain successively launched dedicated ASIC mining machines, and mining machine manufacturers rushed to join Kaspa.
On May 17, Bitmain released the first KS 3 model Kaspa mining machine. According to F 2 Pooldata, the KS 3 mining machine has a computing power of up to 8.3 TH/s, a power consumption of 3188 W, and a unit power consumption of 384 W/T. Based on the KAS price at that time, the theoretical daily income of a single mining machine could reach US$2,600. However, insiders in the mining industry revealed to BlockBeats that due to factors such as mining machine manufacturing and technical wear and tear, its actual revenue may not meet this standard.
At present, the mainstream KAS mining machines are Zhuifeng, Ant and Glacier series. The average power consumption of the mining machines is more than 3000 W, and the daily net income can theoretically reach 200 to 300 US dollars.
However, by August of the same year, the price of KAS dropped by about 50% from its high point, and the sales effect of new mining machines after entering the market was not obvious. People familiar with the matter told BlockBeats that this may mean that there are not many high-performance mining machines in circulation, and miners have not yet sold their tokens.
Kaspa mining machine model; picture source:F 2 Pool
However, BlockBeats found that the Kaspas community has always had a strong consensus and cohesion.
August 14, TxBitAnnouncePlatform trading was closed on September 14. Kaspa community users joked that KAS allowed the founder of TxBit to directly achieve his retirement goal. The community will also jointly launch airdrop activities with CoinPal and IceRiver. On November 9, Kaspas community members discovered that the market value ranking information of the KAS token was displayed incorrectly on CoinMarketCap, and strongly requested the official to make changes. The next day, CMC revised the KAS token information, and the KAS ranking jumped from 207th to 34th.
As the price of KAS rises, the income of Kaspa miners is also gradually rising. According to TrustPool data, Kaspas daily miner rewards exceeded US$1.6 million in November, once becoming the second-ranked mining coin.
Ranking of computing power across the entire network; Image source X community
Driven by the recent improvement in the crypto market, the FOMO sentiment of KAS price is really strong has begun to spread in the secondary market. Some community users have discovered that mainstream exchanges seem to be ready to make moves on KAS.
On November 3, the OKX Web3 wallet was connected to the Kaspa Network. On the 16th, Binance announced that it would launch the KAS perpetual contract. The price of KAS rose by nearly 20% in a short period of time, starting an ecological flywheel.
Mining coins enter the gold rush market, SafeTrade surfaces
Driven by the rise in KAS currency prices, the mining currency sector has also reached an emotional high. Among them, mining coins such as Spacemesh (SMH), Zephyr Protocol (ZEPH), and Qubic (QUBIC) have received high attention. BlockBeats found that the name SafeTrade appeared frequently in many communication communities.
In August this year, Spacemesh (SMH) was listed on SafeTrade, and its price rose from US$0.42 to a maximum of US$2.285, an increase of 442%. In the same month, SafeTrade announced the listing of Qubic (QUBIC), and its token price rose to a maximum of $0.0000039, an increase of 1566% since its launch.
SafeTrade is a centralized cryptocurrency trading platform founded in 2018. Although it has been established for 5 years, it still ranks 225th among trading platforms according to BitDegree Exchange Tracker. According to Coingecko data, SafeTrade’s 24-hour trading volume is less than $3 million at the time of writing. However, it is such a third-tier trading platform with serious lack of liquidity that has become the preferred liquidity exit venue for miners.
According to SafeTrades official website, the platform currently has 53 currencies and 102 trading pairs, most of which are PoW mining coins. Among them, there are several types of PoW currencies that are currently being discussed, such as SMH and QUBIC.
SafeTrade currency interface; Source: SafeTrade
TxBit brought us KAS and then went offline. Now SafeTrade brings us QUBIC and SMH. Thrifty SoFi consultant deXer (@DexerXP) tweeted on X (original Twitter), saying QUBIC and SMH are still there today. It’s not on the lists of Coingecko and Coinmarketcap, it’s still too early.”
BlockBeats noticed that although most PoW currencies on SafeTrade have experienced price flywheels, there are also many doubts about the platform in the community. Among them, the trading platform is too small and looks strange is the main concern of users. A user bluntly said in the community, I want to trade QUBIC, but I dont trust SafeTrade at all and said that he would rather conduct over-the-counter transactions than put money into the exchange.
On November 12, due to too many people buying QUBIC and the server being temporarily unable to handle it, SafeTrade closed the trading channel. The next day, when Qubic officially issued an article explaining how to purchase QUBIC, a large number of users stated in the comment area that the funds they transferred to the platform could not be received. On that day, the price of QUBIC fell from its highest point to $0.0000023, a drop of 69%. After SafeTrade restored entry and exit channels, the token price rose again.
PoW Exchange: Mining Coin Mythical Assembly Line
BlockBeats’ investigation found that “PoW Exchange” seems to be a group with fixed business routines and community, but it has received little attention from the mainstream encryption market.
In addition to SafeTrade mentioned above, BlockBeats also discovered a number of small PoW exchanges such as TxBit, Exbitron, XeggeX, TradeOgre, etc. These exchanges have very similar trading interfaces. Most of them directly use the K-line chart of Trading View and do not have their own trading instruction system. In addition to common mainstream currencies, this type of exchange focuses on ultra-small market value PoW mining coins, and often performs price myths.
The picture above shows the trading currency interface of XeggeX, and the picture below shows the trading currency interface of TradeOgre.
Among them, TxBit, which was the first to launch KAS, announced in August that it would permanently shut down one month later. According to official sources, the platform stated that the decision to shut down was made due to rising compliance costs and uncertainty about the legal supervision of cryptocurrency.
In addition to TxBit, which has been shut down, Exbitron has also faded out of the market this year. Launched in May 2021, Exbitron is a centralized trading platform headquartered in Germany that also focuses on new currency trading. In early February this year, Exbitron suffered a hacker attack and $390,000 worth of TRX was stolen. Since then, there have been few updates on its official Twitter account, and there have been no price changes for trading pairs on the website.
Exbitron currency interface; Source: Exbitron
BlockBeats found that PoW exchanges such as SafeTrade are actually regarded by many users as handlers for early price discovery.
Crypto trader Kaduna (@CryptoKaduna) once wrote on Its another thing. Community members who have become users of PoW exchanges often call for these small currencies to be listed on MEXC and Gate.
Listing on second-tier exchanges such as MEXC seems to have become the main consensus and fixed expectation for the community to buy mining coins. In October this year, FACTORN (FACT), which has been listed on XeggeX, officially launched a community donation plan to crowdfund MEXC currency listing fees. The fundraising target is FACT tokens worth US$60,000 and US$45,000 USDT.
Going online on second-tier exchanges can bring more liquidity to the tokens. It can not only provide an exit window for early entrants, but also help the tokens to complete the price increase again. This path was promoted in the Mining Coin Sector in November this year. It is especially obvious since entering the emotional climax.
OctaSpace (OCTA), which was listed on MEXC from SafeTrade in August this year, broke through $0.69 on November 17, rising by more than 36.8% since its listing. During this period, MEXC contributed 82.09% of the trading volume. Zephyr Protocol (ZEPH), which launched MEXC from XeggeX in September this year, exceeded $15 on November 1 and has increased by more than 300% since its listing. During this period, MEXC contributed 96.65% of the transaction volume.
An article published in Block Boundary in 2019 titled The “Binance Effect” falls and the “Matcha Effect” risesThe public account article mentioned MEXCs early role as a mining currency headhunter:
Some projects regard MEXC as a benefit, and their goals are surprisingly consistent. The first step is to try the waters on a small trading platform. When the time is right, the second step is to start deploying MECX, and finally consider going to Huobi or Binance sprint.
Not only the platform currency, but also the highest prices of many other projects on Matcha were achieved on the Matcha platform, so that later project parties regarded the listing of Matcha as a benefit. The old editor chatted with several project parties, and their goals were surprisingly consistent. The first step is to go to a small trading platform to test the waters. When the time is right, the second step is to start planning for Matcha. Finally, consider going to Huobi or Binance to sprint.
Source: Block Boundary
People familiar with the matter told BlockBeats that behind the rise in the “mining currency sector” there is actually a mature and complete chain of interests. BlockBeats summarized it as follows:
1. The project party establishes the project and begins to promote the project;
2. Some mining machine manufacturers (many of which are project parties themselves) sell mining machines and withdraw early funds;
3. Use part of the withdrawn funds to receive the tokens thrown by miners to the market. Since the income from selling mining machines is much greater than the mining income, the price can be raised;
4. After the second-tier exchange observes price fluctuations, it will consider listing the tokens on its own platform. After the listing is completed, the project team can sell part of the tokens to retail investors on the platform;
5. Some large-scale mining projects will also regularly produce new mining machines according to the mining difficulty, and use the new round of income and remaining cooperative capital to push up the token price again, attracting the attention of first-tier exchanges such as Binance, with a view to landing on mainstream platforms , the goal of obtaining more liquidity.
Compared with public chain ecosystems such as Ethereum and EVM or encryption tracks such as DeFi and NFT, PoW mining and the mining currency market have always been one of the areas that lack the most attention in the encryption field, and its industrial chain and business model are not the majority. People know. It is this certain degree of hiddenness and high risk threshold that creates space for some upstream and downstream participants in the mining field to achieve sustained arbitrage.
At present, the Bitcoin ecosystem continues to be hot, and mining coins as a related concept are gradually attracting attention from the mainstream encryption market. The KAS contract on Binance marks the first time that this hidden production line has opened up the value discovery path from the third-tier PoW exchange to the mainstream trading platform. Will the mining currency community seize the opportunity to introduce continuous liquidity increments into the market?
At the same time, BlockBeats reminds readers that many of the third-tier trading platforms mentioned in the article are not endorsed by reliable teams, and many token projects also have funding attributes. Therefore, they need to consider risks and invest cautiously.
