Poolin proposes to replace its creditors’ funds with derivative tokens – BeinCrypto

Poolin suspended its withdrawals ten days ago, before returning to its creditors with a proposal to soften the confiscation of their assets.

Derivative tokens created for the occasion

While crypto companies such as Voyager Digital and Celsius Network are moving towards the end of their bankruptcy management, other companies are still experiencing liquidity problems. Mining giant Poolin recently announced the suspension of withdrawals for its customers. After considering several options, the management team came back to its creditors to offer them a temporary solution.

It looks like Poolin has yet to find a way to re-authorize withdrawals. In order to alleviate the situation for its customers, the mining company offers to replace the confiscated funds with brand new ERC-20 tokens. Specially created for the occasion, these should replace BTC, ETH and other assets held by creditors. Labeled IOU, these tokens should represent the original coins with a 1:1 ratio. Thus, the losses should be limited for their receivers. Note, however, that the token will be subject to the same volatility as the latter.

For example, miner Darren has 2.5 BTC, 10 ETH, and 20,000 USDT on his PoolinWallet. He also has 300 LTC, 100 ZEC and 12,000 Doge in the PoolinMiningPool mining pool account. In this case, he will receive a total IOU-token allocation of 2, IOUBTC, 10 IOUETH, and 20,000 IOUUSDT in his asset account as well as 300 IOULTC, 100 IOUZEC, and 12,000 IOUDoge in his mining pool account.

Excerpt from communicated of Poolin regarding derivative tokens

The replacement of funds with IOU tokens will be automatically implemented. Customers will be able to withdraw them immediately and trade them on platforms just like the original coins. On the other hand, the funds confiscated at the origin cannot be recovered and will be the property of Poolin.

Meanwhile, Poolin is converting its mining services

The Ethereum merger has been successfully completed and major ETH mining companies need to transform their services if they want to continue their business. The largest Ethermine mining farm has just closed its doors.

However, Poolin decided to hold on and turn to another token. In effect, according to the Ethereum teamPoolin would be one of the professionals who chose to mine ETHW, a version of the original coin that remained in Proof-of-Work.

Source: Ethermine Twitter account

However, mining farms remain threatened by the energy shortage that could affect the whole world next winter. Although The Merge has significantly reduced the energy consumption of Ethereum, mining companies continue to increase their activity with the ETHW. Time will tell us if these will be able to maintain themselves despite possible electricity restrictions.

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Poolin proposes to replace its creditors’ funds with derivative tokens – BeinCrypto


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