Miner

• Incentives:
  • Liquidity in advance (borrow money with promise to mine)
  • Speculation (Want to sell more before it drops)
  • Earn premium and reduce risk by helping others to mine collectively
  • Easy tool for leverage
• Example: Suppose the price of CKB now is 0.01 USD. A mining provider can mine 1 CKB at the cost of 0.008 USD at the moment and
  • At the moment, the expected return of spending 0.008 is 0.01 (1 * 0.01)
  • For liquidity, this MP can propose mining offering at 0.95 CKB: Earn less but right away;
  • If this MP speculates the price of CKB to drop, this MP can propose mining offering at 0.9 CKB worth of USD and later buy CKB at a lower price to repay;
  • If this MP doesn’t want to take risk of holding CKB and just want to earn premium of mining for others, this MP can propose mining offering at 0.009 USD consistently and sell it at market price if there’s enough mining sponsor;
• As you can be both mining provider and mining sponsor at the same time, you can adjust your risk exposure of being a mining provider.

How to Use CDP Mining