Leading cryptocurrency exchange by market share Binance has announced that through its crypto mining pool Binance Pool, it has introduced a $500 million miners lending project which will offer financial support to Bitcoin (BTC) miners.
The project will offer secure debt financing services to both the public and private ‘blue-chip’ BTC mining companies as well as other digital asset infrastructure providers globally.
Binance Pool designed this fund as part of its responsibilities to ensure a healthy digital assets ecosystem. Interested eligible borrowers are expected to offer a form of security that must be satisfactory to Binance. This security could either be in the form of digital or physical assets.
The mining loan which is expected to span between 18 and 24 months has an interest rate range of 5% to10%. However, the maximum amount borrowable by a single borrower in a single request was not specified.
In addition to all of these conditions, Binance would have to ascertain the current performance, mining capacity, and security worth of the borrower. This is to ensure the creditworthiness of the borrower and the mining facility. Attempting to clarify the ‘blue-chip’ category of borrowers, a Binance spokesperson issued a statement.
“One of the requirements is that the applicant must be classified as a Binance VIP user and connect at least 500 PH/s to the Binance Pool for a minimum of 24 months after the loan is issued,” the spokesperson commented
Binance Joins Other Mining Lenders
Markedly, Binance Pool is the latest to join the growing list of firms that are interested in providing capital for BTC mining. Jihan Wu, the founder of crypto-mining equipment supplier Bitmain which halted the provision of its service to China last year, is also developing a $250 million to buy out crypto assets from troubled mining organizations.
Decentralized Finance (DeFi) platform Maple Finance in collaboration with Australian financial services firm Icebreaker Finance floated a liquidity pool worth $300 million for certified BTC miners. For now, the loan offering is only available to entities in North America, Canada, and Australia that meet treasury management and power strategies standards.
Binance Pool’s condition seems more attractive than Maple Finance which offers its loan for only 12 to 18 months with an interest rate of 15%-20%.