Please describe your proposed solution.
Our project democratizes access to mining and bridges the gap between the traditional insurance sector and defi by offering fair opportunities to people, for participating in mining and our revenue-generating activities, with the long-teram goal to integrate the protocol into insurance.
Our protocol consists of three layers:
1.Cost-efficient mining
Our team has deep knowledge and connections across the mining industry. Thanks to this broad experience, we strive to always strike the best deals in terms of mining machines, electricity and hosting, maximizing the returns. Likewise, given the extreme variability of the mining equipment’s prices, we gain and hedge over the market by applying a profit-focused purchasing strategy for mining devices from the beginning of a cryptocurrency lifecycle.
2.Smart portolio rebalancing
The MiFi protocol is designed to mine a basket of PoW cryptocurrencies (Bitcoin and selected Altcoins) and periodically convert Altcoins to Bitcoin (BTC). This strategy is generated through a
profitability study, which proved that Altcoin mining and conversion in BTC outperformed simple BTC mining by 3x.
Mining Altcoins is more capital-efficient, and their mining device’s price is lower and more stable than those needed for mining BTC. MiFi applies a data-proofed methodology for Altcoin selection and swap. In each mining pool, there is a predefined number of coins; once the pool is filled, the swapping happens based on an algorithm which determines the conversion rate of altcoin to BTC or to stablecoin. This mining diversification gives the MiFi protocol a hedge when BTC price drops to a mining break-even point.
3.Defi layer
The MiFi protocol will launch its native token as a vehicle to participate in the protocol and to develop further integration with other DeFi protocols. A dedicated Dapp will work as a front-end to interact with the protocol with a frictionless user experience.
The Dapp will be running on the Cardano blockchain. It will enable matching of user’s Cardano and BTC wallet, MiFi token staking, BTC rewards accounting and distribution. Token holders can stake the MiFi tokens on the Dapp to receive the rewards in BTC directly in their BTC wallet.
Cardano and BTC networks are both based on the Unspent Transaction Output (UTXO) model. We want to leverage the strengths of decentralization, security and low fee offered by the Cardano network.
We’ve consulted the specialized Haskell development firms for feasibility study and got positive feedback. The dapp can be created and delivered within a limited development time.
We will be the first mining protocol to launch on Cardano. The unique value proposition of MiFi has brought attention from institutions and the general public. Among them are entities and people who are not familiar with Cardano yet. We expect to bring a new audience and liquidity into the Cardano ecosystem.
The protocol’s revenue share model is 80% to users, 20% to protocol treasury, which will be re-invested into business operation and expansion. For incentivizing long-term staking, the protocol concedes part of its revenue share (80%) and gives them to users as an extra reward.
More details in the Light Paper
Please describe how your proposed solution will address the Challenge that you have submitted it in.
The challenges we’ve outlined:
1.Mining’s complexity and high investment leave non-professional investors out of the game
Solution: fractionalize the entry ticket in mining and cancel all the technical barriers by using the MiFi token and the dapp for token staking and revenue share.
2.Remaining in profit during market dump
Solution: we diversify mining in different altcoins and continuously search for locations where energy costs are cheaper. Also, given the extreme variability of the mining equipment’s prices, we gain and hedge over the market from the beginning of a cryptocurrency lifecycle by applying a profit-focused purchasing strategy for mining devices.
3.Renovate the outdated insurance sector
Solution: in the long term, our protocol treasury will be used to back the Insurtech layer. MiFi protocol will have a new product as an insurance broker.
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
Profitability when BTC price drops
When BTC price drops to a mining rig's shutdown price, mining is not profitable. To hedge this risk, we mine altcoins to stay afloat and increase profitability. We continuously search for locations where the energy cost is cheaper.
Security risk
Various factors can compromise the security of the procotol. To reduce this risk to the minimum level, we design a robust custody strategy comprising third-party professional custody and multi-sig.
Rising mining difficulty
For this predictable challenge, our strategy is to deploy as many hashrate as possible when BTC price falls (now). And optimize electricity costs by searching for locations with advantageous energy cost rates.