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Luxor’s Aaron Foster on Bitcoin Mining’s Growing Sophistication

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2 дня ago

12 апреля, 2025

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Luxor Technology wants to make bitcoin mining easier. That’s why the firm has rolled out a panoply of products (mining pools, hashrate derivatives, data analytics, ASIC brokerage) to help bitcoin miners, large and small, develop their operations.

Aaron Forster, the company’s director of business development, joined in October 2021, and has seen the team grow from roughly 15 to 85 people in the span of three and a half years.

Forster worked a decade in the Canadian energy sector before coming to bitcoin mining, which is one of the reasons why he’ll be speaking about the future of mining in Canada and the U.S. at the BTC & Mining Summit at Consensus this year.

Follow full coverage of Consensus 2025 in Toronto May 14-16.

In the leadup to the event, Forster shared with CoinDesk his thoughts on bitcoin miners turning to artificial intelligence, the growing sophistication of the mining industry, and how Luxor’s products enable miners to hedge various forms of risk.

This interview has been condensed and edited for clarity.

CoinDesk: Mining pools allow miners to combine their computational resources to have higher chances of receiving bitcoin block rewards. Can you explain to us how Luxor’s mining pools work?

Aaron Forster: Mining pools are basically aggregators that reduce the variance of solo mining. When you look at solo mining, it’s very lottery-esque, meaning that you could be plugging your machines in and you might hit block rewards tomorrow — or you might hit it 100 years from now. But you’re still paying for energy during that time. At a small scale, it’s not a big deal, as you scale that up and create a business around it.

The most common kind of mining pool is PPLNS, which means Pay-Per-Last-N-Shares. Basically, that means the miner does not get paid unless that mining pool hits the block. That’s also due to luck variance, so it’s no different from that solo miner’s situation. However, that creates revenue volatility for those large industrial miners.

So we’re seeing the emergence of what we call Full-Pay-Per-Share, or FPPS, and that’s Luxor is operating for our bitcoin pool. With FPPS, regardless of whether we find a block or not, we’re still paying our miners their revenue based on the number of shares they’ve submitted to the pool. That gives revenue certainty to miners, assuming hashprice stays the same. We’ve effectively become an insurance provider.

The problem is that you need a very deep and strong balance sheet to support that model, because while we’ve reduced the variance for miners, that risk is now put on us. So we need to plan for that. But it can be calculated over a long enough period of time. We have different partners in that regard, so that we don’t bear the full risk from our balance sheet.

Tell me about your ASIC brokerage business.

We’ve become one of the leading hardware suppliers on the secondary market. Primarily within North America, but we’ve shipped to 35+ countries. We deal with everybody from public companies to private companies, institutions to retail.

We’re primarily a broker, meaning we match buyer and seller, mostly on the secondary market. Sometimes we do interact with ASIC manufacturers, and in certain cases we do take principal positions, meaning we use money from our balance sheet to purchase ASICs and then resell them on the secondary market. But the majority of our volume comes from matching buyers and sellers.

Luxor also launched the first hashrate futures contracts.

We’re trying to push the Bitcoin mining space forward. We’re a hashrate marketplace, depending on how you look at our mining pools, and we wanted to take a big leap and take hashrate to the TradFi world.

We wanted to create a tool that allows investors to take a position on hashprice without effectively owning mining equipment. Hashprice is, you know, the hourly or daily revenue that miners get, and that fluctuates a lot. For some people it’s about hedging, for others it’s speculation. We’re creating a tool for miners to sell their hashrate forward and use it as a basic collateral or a way to finance growth.

We said, ‘Let’s allow miners to basically sell forward hashrate, receive bitcoin upfront, and then they can take that and do whatever they need to do with it, whether it’s purchase ASICs or expand their mining operations.’ It’s basically the collateralization of hashrate. So they’re obligated to send us X amount of hashrate per month for the length of the contract. Before that, they’ll receive a certain amount of bitcoin upfront.

There’s a market imbalance between buyers and sellers. We have a lot of buyers, meaning people and institutions wanting to earn yield on their bitcoin. What you’re lending your bitcoin at is effectively your interest rate. However, you could also look at it like you’re purchasing that hashrate at a discount. That’s important for institutions or folks that don’t want physical exposure to bitcoin mining, but want exposure to hash price or hashrate. They can do that synthetically through purchasing bitcoin and putting it into our market, effectively lending that out, earning a yield, and purchasing that hashrate at a discount.

What do you find most exciting about bitcoin mining at the moment?

The acceptance and natural progression of our industry into other markets. We can’t ignore the AI HPC transition. Instead of building these mega mines that are just massive buildings with power-dense bitcoin mining operations, you’re starting to see large miners turning into power infrastructure providers for artificial intelligence.

Using bitcoin mining as a stepping stone to a larger, more capital intensive industry like AI is exciting to me, because it kind of gives us a bit more acceptance, because we’re coming at it from a completely different angle. I think the biggest example is the Core Scientific / CoreWeave deal structure, how they’ve kind of merged those two businesses together. They’re complimentary to each other. And that’s really exciting.

When you look at our own product roadmap, we have no choice but to follow a similar roadmap to bitcoin miners. A lot of the products that we built for the mining industry are analogous to what is needed at a different level for AI. Mind you, it’s a lot simpler in our industry than in AI. We’re our first step into the HPC space, and it’s still very early days there.

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Bitcoin Hovers at $85K as Fed’s Waller Suggests ‘Bad News’ Rate Cuts if Tariffs Resume

Published

4 часа ago

14 апреля, 2025

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Bitcoin (BTC) drifted ever so gently upwards Monday as the broader market adjusts favorably to trade-related news.

The largest cryptocurrency was up 1.6% in the last 24 hours and is now trading just shy of $85,000. Ether (ETH), meanwhile, rose 2.7% in the same period of time to $1,630. The broad-market CoinDesk 20 Index — consisted of the top 20 cryptocurrencies by market capitalization except for stablecoins, memecoins and exchange coins — advanced 1.2%, led by gains in SOL and AVAX.

After a couple of wild weeks, the stock market also edged higher today, the Nasdaq closing with a 0.6% gain and the S&P 500 rising 0.8%. Strategy (MSTR) and MARA Holdings (MARA), led among crypto stocks with roughly 3% gains.

The modest rally came as Federal Reserve Governor Christopher Waller signalling that a return of the original punitive Trump tariffs would trigger the need for sizable «bad news» rate cuts.

«[Tariff] effects on output and employment could be longer-lasting and an important factor in determining the appropriate stance of monetary policy,» said Waller in a speech. «If the slowdown is significant and even threatens a recession, then I would expect to favor cutting the FOMC’s policy rate sooner, and to a greater extent than I had previously thought.»

Further easing concerns was the European Commission, the executive arm of the EU, confirming to hold off on retaliatory tariffs on U.S. goods worth €21 billion until July 14 to «allow space for negotiations.»

Odds that the U.S. and EU will reach a trade agreement to avoid tariffs rose to 65% on blockchain-based prediction market Polymarket after U.S. President Donald Trump reportedly stated that a deal was in the works.

Bitcoin fundamentals recovering

Bitcoin’s relief rally from last week’s tariff turmoil stalled out around the $85,000 resistance level, but the network’s improving fundamentals spur hopes for a breakout, crypto analytics firm SwissBlock Technologies noted.

«Since March, we’ve seen a consistent inflow of new participants,» Swissblock analysts wrote in a Telegram broadcast. «Liquidity is stabilizing, no more erratic swings from early 2025.»

«Once the liquidity gauge holds above the 50 line, short-term price action tends to follow with strength,» Swissblock analysts said. «With network growth aligning, key levels aren’t just being revisited, they’re being accumulated.»

«This is the kind of structural support that underpins sustainable rallies,» they concluded.

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SEC Delays Decisions on In-Kind Redemptions, Ether ETF Staking

Published

5 часов ago

14 апреля, 2025

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The Securities and Exchange Commission (SEC) is not yet ready to make a decision on two critical features that issuers of the spot crypto exchange-traded funds (ETFs) are hoping to add to their products.

The regulator delayed a decision on whether it will allow in-kind redemptions for WisdomTree’s Bitcoin Fund (BTCW) and VanEck’s Bitcoin Fund (BITB) and Ethereum Fund (ETHW) on Monday. It also moved its deadline for a decision in regards to a proposal by Grayscale to allow staking its Ethereum Trust (ETHE) and Mini Ethereum Trust (ETH), which the asset manager’s exchange, NYSE Arca had requested in February.

Cboe, the exchange that is associated with five of the other issuers of an ether ETF, including Fidelity, Franklin Templeton, VanEck and Invesco/Galaxy, submitted its amended filing in March for the Fidelity Ethereum Fund (FETH) and the Franklin Ethereum ETF (EZET).

The SEC has not previously allowed staking in spot ether ETFs. But with the appointment of new SEC Chair Paul Atkins, who was confirmed by the Senate last week, things could change quickly.

Several other jurisdictions, including Hong Kong, Canada and Europe, have already green-lighted staking for ETFs, but that doesn’t put much pressure on the SEC, said one expert.

“The SEC will take their time and move as fast or as slow as they want,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “They don’t care what other regulators are doing in my experience, they might learn from them but I don’t think a regulator approving something is going to make the SEC jump through hoops and catch up. They’ll go at their own pace.”

The regulator now has until June 3rd to make a decision on in-kind redemptions on Bitwise’s and WisdomTree’s products and June 1st to decide on Grayscale’s staking proposal.

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Circle’s EURC Stablecoin Surges 43% to Record Supply as Dollar Troubles Fuel Demand

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5 часов ago

14 апреля, 2025

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Circle’s euro-backed stablecoin, EURC, surged to a record supply as mounting U.S. trade tensions and a weakening dollar likely fuel demand for euro-denominated digital assets.

EURC’s supply grew 43% over the past month to 217 million tokens worth $246 million, ranking above Paxos’ Global Dollar (USDG) and below Ripple’s RLUSD by market capitalization, RWA.xyz data shows. Most of the EURC tokens circulate on the Ethereum network, up 35% in a month to 112 million, while Solana saw the fastest, 75% expansion to 70 million tokens. Base, Coinbase’s Ethereum layer-2, also saw a 30% growth to 30 million in EURC supply.

The token also experienced an uptick in on-chain activity, with active addresses rising 66% to 22,000 and the monthly transfer volume surpassing $2.5 billion, up 47% in a month, per RWA.xyz.

EURC is currently the largest euro stablecoin on the market, but it lags far behind its dollar-denominated counterparts. Dollar-pegged stablecoins make up 99% of the rapidly growing stablecoin market, led by Circle’s $58 billion USDC and rival Tether’s $143 billion USDT token.

The accelerating growth of EURC could be a sign of growing demand for diversification to euro-denominated digital assets, particularly as global investors navigate increasing economic uncertainties in the U.S. with the Trump administration wide-scale tariff rollout. The greenback weakened 9% against the euro since the start of the year.

Xapo Bank, a Gibraltar-based Bitcoin-focused financial services firm, reported Monday a 50% increase in euro deposit volumes during the first quarter, outpacing the 20% rise in USDC stablecoin deposits. Meanwhile, deposits in USDT declined by over 13%.

«This rapid increase in volume came amidst mounting concern about the future of U.S. dollar primacy and the threat of a U.S. recession as markets braced for Trump’s planned ‘Liberation Day’ in April,» the firm said in the report.

Stablecoin swap volumes between foreign currency pairs on Ethereum-based decentralized exchanges also soared to multi-year highs last week, dominated by the EUR-U.S. dollar pair, Blockworks data showed.

EURC also has likely benefited from Tether’s withdrawal of its euro-backed stablecoin (EURT) with E.U.-wide MiCA regulations going into effect this year, while a number of exchanges delisted USDT for E.U. users to comply with regulations, including Binance at the end of March.