New DeFi futures to enable hedging against Bitcoin mining difficulty
July 22, 2021. Summarized by summa-bot.
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SynFutures founder and CEO Rachel Lin said that the team wanted to allow traders to hedge against all the factors affecting their mining returns.
Decentralized derivatives exchange SynFutures announced a new product called Bitcoin (BTC) Hash Rate Futures that uses the biggest cryptocurrency’s ever-changing mining difficulty as a basis to open long or short positions.
Touted as fully decentralized hash rate futures, SynFutures’ new offering would let users trade on Bitcoin mining difficulty with wrapped BTC (WBTC).
Hash rate and mining difficulty are two core mechanics of Bitcoin that became even more popular with the miners’ exodus following China’s crackdown.
According to the announcement, SynFutures developed the Hash Rate Futures, now in closed alpha, by designing an oracle to validate Bitcoin block headers directly and extract the mining difficulty.
Miners would be able to short the Hash Rate Futures to hedge against the risk of mining difficulty increases or long electricity futures to determine the power cost.