Binance Pool, as one of the world's biggest crypto mining pools, has a responsibility to contribute to the health of the digital asset ecosystem. Binance Pool is launching a $500 million financing scheme to help crypto miners and digital infrastructure providers in light of current market conditions.
Loans from Binance Pool
This initiative, the first for Binance Pool, was created to provide safe debt financing services to both public and private blue-chip bitcoin (BTC) mining and digital asset infrastructure enterprises worldwide.
Binance Pool, the company's mining service, will provide loans for private and publicly-traded Bitcoin miners, who will be required to guarantee security in the form of tangible or digital assets to get loans lasting 18-24 months. Binance will impose interest rates ranging from 5% to 10%.
Bitcoin Mining Revenue
The proposal comes after a difficult few months for Bitcoin miners as the price of bitcoin fell. Miners' incomes have plummeted due to low bitcoin prices, with Compute North declaring bankruptcy.
According to statistics from The Block Research, bitcoin miners' earnings plummeted 16.2% to over $550.5 million last month, marking the fifth decline in the past six months and the lowest sum since November 2020.
Binance is not the only company attempting to help the cryptocurrency mining sector. Maple Finance, a DeFi platform, announced a $300 million loan pool for Bitcoin miners last month. The site will charge interest rates ranging from 15% to 20% and offer loans with terms ranging from 12 to 18 months.
The debt financing service is a solution to help miners overcome difficulties when the Bitcoin price is constantly bottoming, resulting in revenue impact. Binance Pool lends at attractive interest rates compared to other lenders in the market. Hopefully, the loan from Binance will partly help miners and companies get through this challenging period and continue to mine Bitcoin until the supply runs out. Since then, the price of Bitcoin has been expected to increase day by day because supply has run out while demand increases in the future.