Litecoin Foundation Partners With Digital Asset Manager Metalpha to Develop Hedging Products for LTC Miners

The partnership will jointly develop the Litecoin ecosystem to hedge risk and lower carbon emissions.

AccessTimeIconFeb 24, 2023 at 7:11 a.m. UTC
Updated May 9, 2023 at 4:08 a.m. UTC

Metalpha Technology Holding Ltd (MATH), a wealth management company for cryptocurrencies, said on Friday it will work with Litecoin Foundation to develop sustainable mining solutions for the Litecoin ecosystem.

The Litecoin foundation is a nonprofit that maintains and develops products for the namesake blockchain.

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  • The partnership’s specific areas of research will include developing derivative products, facilitating renewable energy use, increasing energy efficiency and lowering carbon emissions from mining on the Litecoin Network.

    Metalpha will develop financial derivative products for LTC tokens, it also aims to support crypto miners with hedging products against market risk and to lower the environmental impact of crypto mining.

    Hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset.

    Crypto mining is a resource-intensive activity that relies on powerful computers to process and validate transactions for proof-of-work blockchains, such as Bitcoin and Litecoin. Miners receive the network’s tokens as a reward, which are typically sold on the open market to cover extensive costs and turn profits.

    However, a drop in crypto prices has lead to churn for miners as they are unable to convert the high costs. This is where hedging comes in, allowing miners to continue operations by generating money regardless of market movements.

    Meanwhile, Metalpha and Litecoin Foundation added they will work with universities and research institutions to further sustainable blockchain innovation, support public education around the Litecoin network, and improve network awareness, adoption and scalability.

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    Shaurya Malwa

    Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.