Wallet Service of Top Bitcoin Mining Pool Poolin Will Issue 'IOU' Tokens After Suspending Withdrawals
Poolin acknowledged liquidity issues last week and halted withdrawals on its wallet service the next day.
Poolin Wallet, the wallet service of one of the largest bitcoin (BTC) mining pools, has announced that it will issue IOU (I Owe You) tokens to impacted customers after it froze withdrawals last week.
In a Tuesday post on its official Medium account, Poolin Wallet said that it will calculate user balances across its native wallet and mining pool before issuing a total of six IOU tokens. Deposits made after Sept. 15, when the IOUs will be distributed, will not be frozen and will not be affected by the IOU mechanism, the post said.
The tokens will reflect a 1:1 ratio of user balances across bitcoin (BTC), ether (ETH), tether (USDT), litecoin (LTC), Zcash (ZEC) and Dogecoin (DOGE). Poolin IOUs can be traded for the corresponding cryptocurrency, used to buy new mining machines or shares of the company.
Otherwise, Poolin's intention is to gradually burn IOU tokens batch-by-batch. Users can also withdraw IOU tokens from the platform at any time.
Users on Poolin's official telegram channels didn't seem convinced by the solution, with some being confused about the mechanism and others compared the situation to Terra, which collapsed in May.
Poolin said that the reason behind the withdrawal freeze was related to liquidity issues. The value of cryptocurrencies has dwindled significantly this year, with bitcoin sliding by more than 50% since the start of the year.
The mining pool lost almost half of its computing power from August 31 to Sept. 11, according to BlocksBridge Consulting, a PR consultancy for miners that publishes research on the industry.
UPDATE (Sept. 13, 14:00 UTC): Adds more details on IOU system, user reaction and pool stats.
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