From the third-tier exchange to Binance contracts, the mining coin gold mining "production line" behind KAS
The listing of KAS contracts on Binance marks the first time this "hidden production line" has opened up a "value discovery path" from the third-tier "PoW exchanges" to mainstream trading platforms.Author: Jack, Kaori, BlockBeats
Recently, due to the continuous rise of the Kaspa token KAS, the PoW concept has become another hot topic following the Bitcoin ecosystem concept, with the term "mining coin sector" frequently appearing in many community discussions. However, aside from the boost from Bitcoin-related concepts and market trends, the sudden rise of the PoW concept does not seem to be a coincidence. Behind the "KAS myth," there appears to be a hidden "mythical mining coin production line" that is not known to the mainstream market.
KAS Flywheel
On November 7, 2021, the mainnet of Kaspa, built on the GhostDAG protocol, was officially launched. It uses a BlockDAG architecture to solve scalability issues associated with traditional blockchain operations. The KAS mining algorithm is kHeavyHash, supporting GPU solo mining or dual mining with ETHW and ETC, and is compatible with some FPGA and ASIC mining machines. According to F2 Pool data, the current total network hash rate of KAS is 60.97PH/s, with a 24-hour output revenue of $1.5267 million.
The economic model of Kaspa is similar to Bitcoin's issuance mechanism, with no pre-mining or pre-sale; all tokens can only be obtained through mining. Its total supply of KAS is 28.7 billion tokens, expected to be mined out in 186 months, with the circulation expected to be fully released around April 2037.
On November 16 of this year, Binance suddenly announced that it would launch KAS perpetual contracts with 1-50x USDT leverage at 10:00 on November 17. According to CoinGecko data, as of the time of writing, the PoW public chain Kaspa token KAS has surpassed $0.13, currently quoted at $0.134, with a 24-hour increase of 18.3% and a price increase of 37.40% over the past 7 days.
KAS price trend; Image source: CoinGecko
The price surge of KAS can be traced back to the end of May 2022 when it was listed on TxBit, at which time the price of KAS was as low as $0.0002. In September of the same year, KAS was listed on MEXC, and the price quickly soared to $0.008.
By April 2023, the price of KAS reached an all-time high of $0.039, an increase of over 1850% in less than a year. During that month, KAS's trading volume continued to rise, fluctuating between $15 million and $40 million daily, even briefly exceeding $500 million. The trading platforms with the largest trading volume for KAS during this period were MEXC Global, TxBit, Gate.io, and Coinexcom.
In May, Ice River and Bitmain launched dedicated ASIC mining machines, and mining machine manufacturers rushed to enter the Kaspa market.
On May 17, Bitmain released the first KS3 model Kaspa mining machine. According to F2Pool data, the KS3 mining machine has a computing power of up to 8.3TH/s, a power consumption of 3188W, and a unit power consumption of 384W/T. Based on the KAS price at that time, a single mining machine could theoretically earn up to $2600 per day. However, industry insiders revealed to BlockBeats that due to factors such as mining machine manufacturing and technical wear, the actual earnings may not reach this standard.
Currently, the mainstream mining machines for KAS are from the Pursuit Wind, Antminer, and Ice River series, with average power consumption exceeding 3000W, and theoretical daily net earnings reaching $200 to $300.
However, by August of the same year, the price of KAS had dropped by about 50% from its peak, and the sales performance of new mining machines entering the market had not been prominent. Insiders told BlockBeats that this might indicate that there are not many high-performance mining machines circulating in the market, and miners have not yet sold their tokens.
Kaspa mining machine models; Image source: F2Pool
However, BlockBeats found that the Kaspa community has maintained a strong consensus and "cohesion."
On August 14, TxBit announced that it would close platform trading on September 14, and Kaspa community users jokingly said, "KAS has helped TxBit's founder achieve retirement goals directly." The community also planned to jointly launch an airdrop event with CoinPal and IceRiver. On November 9, members of the Kaspa community discovered that the market capitalization ranking information for KAS tokens on CoinMarketCap was displayed incorrectly and strongly demanded that the official make corrections. The next day, CMC corrected the KAS token information, and KAS's ranking jumped from 207 to 34.
As the price of KAS continued to rise, Kaspa miners' earnings also gradually increased. According to TrustPool data, in November, the daily miner rewards for Kaspa exceeded $1.6 million, making it the second-ranked mining coin.
Network hash rate ranking; Image source: X Community
With the recent positive momentum in the cryptocurrency market, the FOMO sentiment of "KAS price is really strong" began to spread in the secondary market. Some community users noticed that mainstream exchanges also seemed to be "itching" to get involved with KAS.
On November 3, the OKX Web3 wallet integrated with the Kaspa Network, and on the 16th, Binance announced it would launch KAS perpetual contracts, causing the KAS price to briefly rise by nearly 20%, kicking off the ecological flywheel.
Mining Coins Entering the Gold Rush Market, SafeTrade Emerges
Driven by the rising price of KAS, the "mining coin sector" also reached an emotional peak. Among them, Spacemesh (SMH), Zephyr Protocol (ZEPH), Qubic (QUBIC), and other mining coins gained significant attention. BlockBeats found that the name SafeTrade frequently appeared in many communication communities.
In August of this year, Spacemesh (SMH) was listed on SafeTrade, with its price rising from $0.42 to a peak of $2.285, an increase of 442%. In the same month, SafeTrade announced the listing of Qubic (QUBIC), with its token price rising to a peak of $0.0000039, an increase of 1566% since its launch.
SafeTrade is a centralized cryptocurrency trading platform established in 2018. Although it has been around for 5 years, according to BitDegree Exchange Tracker, it still ranks 225th among trading platforms. According to Coingecko data, as of the time of writing, SafeTrade's 24-hour trading volume is less than $3 million. However, this "third-tier trading platform" with severely insufficient liquidity has become the preferred liquidity exit for miners.
According to SafeTrade's official website, the platform currently has 53 cryptocurrencies and 102 trading pairs, most of which are PoW mining coins. This includes several currently popular PoW coins like SMH and QUBIC.
SafeTrade coin interface; Image source: SafeTrade
"TxBit brought us KAS and then shut down, now SafeTrade has brought us QUBIC and SMH," Thrifty SoFi consultant de Xer (@DexerXP) tweeted on X (formerly Twitter), stating, "QUBIC and SMH have not yet appeared on the lists of Coingecko and Coinmarketcap; it's still too early."
BlockBeats noted that although most PoW coins on SafeTrade have experienced "price flywheels," there are also many doubts about the platform within the community. Among them, "the trading platform is too small, which looks strange" is the main concern of users. Some users openly stated in the community, "I want to invest in QUBIC, but I don't trust SafeTrade at all," and expressed that they would rather conduct over-the-counter trading than deposit money into that exchange.
On November 12, due to an overwhelming number of buyers for QUBIC, SafeTrade temporarily closed the trading channel as the servers could not handle the load. The next day, when the Qubic official posted instructions on how to purchase QUBIC, many users in the comments expressed that their funds transferred to the platform had not arrived. On that day, the price of QUBIC dropped from its peak to $0.0000023, a decrease of 69%. After SafeTrade reopened the deposit and withdrawal channels, the token price surged again.
PoW Exchanges: The Mining Coin Myth Production Line
BlockBeats' investigation found that "PoW exchanges" seem to have a fixed business model and community group but rarely receive attention from the mainstream cryptocurrency market.
In addition to the aforementioned SafeTrade, BlockBeats also discovered several small "PoW exchanges" such as TxBit, Exbitron, XeggeX, and TradeOgre. These exchanges have very similar trading interfaces, mostly directly using Trading View's candlestick charts, without their own trading indicator systems. Besides common mainstream cryptocurrencies, these exchanges primarily focus on ultra-small market cap PoW mining coins and often create "price myths."
The above image shows the trading coin interface of XeggeX, while the below image shows the trading coin interface of TradeOgre.
Among them, TxBit, which was the first to list KAS, announced in August that it would permanently shut down in a month. According to official news, the platform stated that the shutdown was due to rising compliance costs and the uncertainty of cryptocurrency legal regulations.
In addition to the already shut down TxBit, Exbitron has also faded from the market this year. Exbitron was launched in May 2021 and is a centralized trading platform based in Germany, also focusing on new coin trading. In early February of this year, Exbitron suffered a hacker attack, losing $390,000 worth of TRX. Since then, its official Twitter has rarely been updated, and there have been no price changes in its trading pairs on the website.
Exbitron coin interface; Image source: Exbitron
BlockBeats found that exchanges like SafeTrade are actually seen by many users as "baton passers" for early price discovery.
Cryptocurrency trader Kaduna (@CryptoKaduna) once wrote on X, "People say diamond projects are all on MEXC and Kucoin; I want to say we should go further, like looking at Txbit, Tradeogre, Xeggex, etc., although whether these trades are safe is another matter." Community members who have become users of "PoW exchanges" often call for these small coins to "list on MEXC and Gate."
Listing on second-tier exchanges like MEXC seems to have become the "main consensus" and "fixed expectation" for the community when buying mining coins. In October of this year, OctaSpace (OCTA), which was listed on MEXC from SafeTrade, broke through $0.69 on November 17, rising over 36.8% since its listing, with MEXC contributing 82.09% of the trading volume. Zephyr Protocol (ZEPH), which was listed on MEXC from XeggeX in September, broke through $15 on November 1, rising over 300% since its listing, with MEXC contributing 96.65% of the trading volume.
In an article published in 2019 titled "The Fall of the 'Binance Effect' and the Rise of the 'Mojito Effect'" on the public account of Blockchain Boundary, it mentioned the situation of MEXC playing the role of "mining coin headhunter" in the early days:
"Some projects regard MEXC as a positive factor, and their goals are surprisingly consistent. The first step is to go to a small trading platform to test the waters, and when the time is ripe, the second step is to plan to list on MEXC, and finally consider rushing to Huobi or Binance."
Not only platform coins, but many projects on Mojito also reached their highest prices on the Mojito platform, leading project parties to regard listing on Mojito as a positive factor. After chatting with several project parties, the old editor found that their goals were surprisingly consistent. The first step is to go to a small trading platform to test the waters, and when the time is ripe, the second step is to plan to list on Mojito, and finally consider rushing to Huobi or Binance."
Image source: Blockchain Boundary
Insiders told BlockBeats that behind the simultaneous rise of the "mining coin sector," there is actually a mature and complete interest chain. BlockBeats summarizes it as follows:
- Project parties establish projects and begin promoting them;
- Some mining machine manufacturers (many are project parties themselves) sell mining machines to recoup early funds;
- Using part of the recouped funds to buy tokens thrown into the market by miners, as the profits from selling mining machines far exceed mining profits, thus achieving price increases;
- Second-tier exchanges observe price fluctuations and consider listing the tokens on their platforms; after listing, project parties can sell some tokens to platform retail investors;
- Some large mining projects will also periodically produce new mining machines based on mining difficulty and use the new income and other cooperative capital to push up token prices again, attracting the attention of first-tier exchanges like Binance, aiming to achieve the goal of listing on mainstream platforms and obtaining more liquidity.
Compared to Ethereum, EVM, and other public chain ecosystems or DeFi, NFT, and other cryptocurrency tracks, PoW mining and the mining coin market have always been one of the least focused areas in the cryptocurrency field, and their industrial chain and business model are not known to most people. It is precisely this degree of "obscurity" and "high-risk" threshold that creates space for some upstream and downstream participants in the mining field to achieve continuous arbitrage.
Currently, the Bitcoin ecosystem remains hot, and mining coins, as a related concept, are gradually gaining attention from the mainstream cryptocurrency market. The listing of KAS contracts on Binance marks the first time this "hidden production line" has opened up a "value discovery path" from third-tier "PoW exchanges" to mainstream trading platforms. Will the mining coin community seize the opportunity to bring in a continuous influx of liquidity?
At the same time, BlockBeats reminds readers that many of the third-tier trading platforms mentioned in this article lack reliable team endorsements, and many token projects have "funding attributes," so it is especially necessary to consider risks and invest cautiously.
