According to market analyst, Sam Rule, “After suspending withdrawals, Bitcoin mining pool Poolin's hash rate share looks to have fallen by more than 50%.”
One of the largest providers of Bitcoin mining-pool services, Poolin, recently disclosed its liquidity issues. It resultantly halted withdrawals, flash trades, and internal transfers from its network. However, this has triggered reactions as the pool now faces distress.
As a temporary fix for the withdrawal freeze, the pool announced on September 14 the issuance of IOU tokens on a 1:1 basis to substitute rewards held in PoolinWallets.
The pool provider noted in a statement,
“The team has come up with the IOU-tokens scheme to minimize the impact of withdrawal suspension. The tokenomics of IOU-tokens will bring intuitive & various options and easy-to-use operations.”
Many contributing miners have since left the pool following the announcement of the withdrawal freeze. This has caused a decrease in hashing power and, consequently, mining revenue.
Market analyst, Sam Rule, pointed out the decline in a tweet. He stated:
“After suspending withdrawals, Bitcoin mining pool Poolin's hash rate share looks to have fallen by more than 50%.”
The pool's hash rate made up about 12% of the Bitcoin network before the announcement. Although this had been falling since the November 2021 peak, the miner exodus caused a sharp decline that reduced its network share to just 4%.
Also, the block rewards produced by the pool have also declined. Block rewards were around 120 BTC before the freeze, but they now come in at 36 BTC.
In a Twitter thread discussing Bitcoin mining issues, a Bitcoin enthusiast, Parker Merritt, noted that the underlying cause for Poolin’s liquidity crunch is still unclear. However, according to speculation, Poolin's problems may be related to some of its new endeavors.
According to Parker,
“Some speculate the issues resulted from the firm's recent foray into #DeFi yield farming, while others point to problems with Poolin's self-mining operations in Texas.”
He added,
“Some also note that Poolin's troubles could be related to their pool payout structure. In the early days of Bitcoin mining, pools leveraged "proportionate" payout models, distributing rewards to miners in real-time as blocks were discovered by the pool.”
A Twitter user that identifies as N8TWON.HODL even called out the provider for scamming users.
According to the user...
