From the perspective of interests: what kind of project will get the support of miners?

Author: Maggie@Foresight Ventures

TL; DR

In the crypto space, miners are a powerful group. I interviewed several large miner companies and summarized how the miner group views blockchain projects. If you are a project owner, you can learn how to get support from miners. This article will answer you from the following 4 questions.

1. How are miners surviving now?**
2. What is the economic model that miners prefer?
3. What are the benefits of miner liking for the project and how much energy do miners have?
4. What kind of projects need to focus on the interests of miners, and how to attract them in?

1. How are miners surviving?

**1.1 The computing power of the mining circle has declined, and the computing power has returned to the traditional industry, which is used for server leasing and a small amount of idleness. **

• Since last year, the market has been bad, ** mining income is not high, and there are many projects with graphics card machines. Many miners choose miners to sell their mining machines, or return to the traditional industry to use them for server leasing**, rent out for graphics rendering, cloud servers, etc.
• In November, the situation began to turn around, and some miners reorganized their computing power to mine in the mining circle.

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

• The price of graphics cards has risen seriously, high-end card leasing or reselling can make money immediately, and miners are reluctant to invest in the unknown field of mining.

• The ban on graphics cards in the United States and the popularity of AI have led to the scarcity and price increase of graphics cards
• 3090 graphics card, a few thousand smaller one rose to 10,000 one.
• 4090 graphics card, two months ago 1W yuan, now 2W yuan.

• The graphics card of the mining circle, the configuration is not so good, The amount of low-end graphics cards 3080, P106, 1080, and 2080 is particularly large, and many of them are idle.

• At present, there are some companies in Shenzhen** that expand low-end graphics cards with soldering methods, so that they can run higher demand algorithms**.
• There are also some companies that make software improvements to AI algorithms, so that these algorithms can run on low-end graphics cards, such as the 3080.

• FIL miner 3090 graphics card is rarely hard to find. Most of the FIL mining machines were bought in 2020~2021, when the 3080 graphics card was already very good. Later, the income declined, and it was no longer invested. Therefore, most FIL miners are 3080 graphics cards.

Second, what is the economic model that miners like?

First of all, as long as the project’s income is high enough, miners are willing to come to mining. Only then do miners pick their preferred economic model.

2.1 Miners like BTC/FIL economic models

1. It is a first-layer chain with a native token.
2. Heap hash power can get more income, miners can earn that much proportion of block rewards with 11% of computing power.
3. Projects with a high proportion of block rewards in the economic model, for example: FIL 60~70% of coins are block rewards. The proportion is not high, and the willingness of miners is not high

2.2 Miners don’t like PoS now, ETH L2, etc.

• Most of the ETH L2 blocks are in the hands of the project team, miners cannot participate, and even if they participate, it is part of the project team’s computing power.
• The current L2 only wants to make zk prover decentralized, and Sequencer is still far from centralization, **miners only charge a little calculation fee here, and the capture of fees is not in the hands of miners, **It is to work for the project party, and there is not enough interest.
• The economic model of these projects is not liked. The project has taken care of the miners in the design of Tokenomics, and the miners are just working to earn some hard-earned money, and the profit margin is not enough, so the miners are not interested enough. In this kind of project, the miners are accompanied, and the success or failure of the project mainly depends on the project party, the employer, the market, etc., and the miners have no right to speak.
• Some L2 projects have already issued coins, and when they do decentralized sequencer/zk prover in the future, it is not good for miners to be incentivized, and it is not friendly to miners.

Third, what are the benefits of miner liking for the project, and how much energy do miners have?

3.1 In most projects, the miner is just a runner at the bottom. (e.g. ETH L2)

The interests of miners are not taken into account in the economic model, and miners are just part-time workers.

• The investor and the project party are in control of the success or failure of the project. can only accompany the run, and the miners have no right to speak.

3.2 The role of miners is evident in the above economic model projects that miners prefer. (e.g. FIL, etc.)

Miners have a lot of investment power. What the miners promised to do it.

**3.3 BTC is very special, and the energy of miners is very large. **

• Pure PoW, 100% of the block rewards are given to miners, no foundation/VC to take money, miners have great power. Miners have a lot of investment capacity, they can do what they promised, and they can even fork.
• In the eyes of miners, it is obvious that the income is cut once every 4 years, and there is anxiety as the days become more and more difficult. Ordinals is an innovation they can see and make them more.

Fourth, what kind of projects need to focus on the interests of miners, and how to attract them?

4.1 Projects that require heap computing resources should consider the interests of miners. (ZK, AI Computing Power)

**4.2 Comfortable co-op mode for miners. **

**The benefits of the new project are unknown to the miners, but they really have to invest in the computer room and electricity bills. Therefore, there is a requirement for a cooperation model. **

The investment in equipment can not be counted, and they are very concerned about the investment in the electricity bill of the computer room. To attract miners, it’s best to choose the cooperative model they prefer.

Of these models, the trust model is the best, and the project is less financially stressful. But this requires the project’s economic model to be miner-friendly and backed by large capital.

V. Summary

1. Projects that require a lot of computer resources, such as storage, ZK, AI, and POW projects, should fully consider the interests of miners when designing economic models.
2. Miners like projects with native tokens, projects with a high proportion of mining in the token model, and projects with a ratio of computing power and income, which can directly refer to the economic model of BTC and FIL.
3. It is best for new projects to follow the “trust mode”, and the economic pressure of the project is less. But this requires the project’s economic model to be miner-friendly and backed by a good investor**. Otherwise, miners are not willing to invest real money into the unknown and generate electricity for love.