Binance is planning to launch its own mining pool, a first for the popular crypto exchange.
The news was broken Tuesday by the Russian crypto news publication Coinlife and later confirmed by three sources in the mining business. Binance CEO Changpeng Zhao tweeted about the pool on Wednesday.
“The company has already hired some professionals for this purpose, some of them former Bitmain employees. The launch is planned for the Q2 2020,” Coinlife wrote.
Jakhon Khabilov, head of the Sigmapool mining pool, said Binance is already offering potential clients “generous” referral bonuses as it has been reaching out to some miners in China to promote the upcoming new service.
The exchange is following the lead of its peers, OKex and Huobi, which launched their own mining pools in August and September 2019, respectively. Both exchanges’ pools are currently among the top 10 pools producing the most blocks in the Bitcoin blockchain, according to Blockchain.com.
Alejandro de la Torre, the vice president of Poolin, currently number two most-popular mining pool, says the key motivation for exchanges to get into the bitcoin mining game is liquidity: Mining is the cheapest way to add liquidity to exchanges, he said.
Igor Runets, CEO of the Bitriver mining farm in Russia, believes launching a mining pool is a logical step for a crypto exchange: “Both these businesses are software-based, so no additional professional skills are needed. The client base would largely overlap: many mining pool users are also clients of exchanges.”