Introducing Alkimiya Protocol

Introducing the Alkimiya, a permissionless open-sourced protocol for hashpower-backed contracts issuance and structured products. In the abstract, the reward produced by hashrate over a period of time is just a stream of cash flows. These cash flows can be in turn deconstructed and restructured into other forms of cash flow generating assets that traders and investors are already familiar with.


Alkimiya Team

The Intelligent Bitcoin Miner, Part II

In our last article, we modeled future price trajectory with a Jump-Diffusion process and used a linear function to characterize how global hashpower responds to changes in price. In this article, we characterize miners into several archetypes, each with different profit margins and risk considerations. Under this framework, change in network hashrate is not just a function of change in price, but an aggregation of the collective outputs of all miners with distinct economics and risk profiles.


Karim Helmy, Leo Zhang, Jack Koehler

Ethereum Blockspace: Who Gets What and Why

Blockspace is the commodity that powers the heartbeats of all cryptocurrency networks. In this article, we illustrate the structure of the Ethereum blockspace market from the perspectives of the supply (miner) and the demand (users). We examine if the current blockspace market design provides depth, ease congestion, or participation is safe and simple. Next, we discuss the popular proposals to optimize the market structure, as well as how the blockspace market will likely evolve in the future.


Leo Zhang, Georgios Konstantopoulos (Paradigm)

The Intelligent Bitcoin Miner, Part I

In this paper, we illustrate that operating hashpower is akin to managing a portfolio, and the difficulties of reflecting the aspects of portfolio in the pricing of hashpower. We walk through how the popular pricing mechanism works, and the flaws of the current valuation heuristics. We parametrize a hashpower portfolio, and show how the outcome changes as we test a broad range of assumptions. As a coda, we argue that the importance of valuation framework is more than just a theoretical exercise.


Leo Zhang, Jack Koehler, David Cai (General Mining Research)

The Alchemy of Hashpower, Part II

In this article, we start by breaking the mining market cycle into four archetypal stages, each with distinct price trends, hardware capacity, and sentiments. We examine the driving forces in each scenario, and illustrate the roles that the hardware reaction time, and reflexivity in hashpower play in shaping these macro cycles.


Leo Zhang, Karthik Venkatesh

The Alchemy of Hashpower, Part I

We categorize all assets that produce hashpower in exchange for cryptocurrency, and synthetic contracts / financial instruments that mimic mining returns as part of the hashpower asset class. Despite its short history, investing in this asset class has grown popular. A number of mining special purpose vehicles (SPV), verticalized institutional mining projects, and mining infrastructure / service providers, mining-related financial contracts were launched to satisfy the demand.


Leo Zhang, Karthik Venkatesh

Bitcoin Mining’s Three Body Problem

Bitcoin mining is a complex phenomenon that connects hardware and software, the energy and financial markets. Invisible rules govern every aspect of it. The performance of an individual operation is determined by various external factors that are often hard to quantify and almost impossible to forecast.


Leo Zhang

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