Short-term mining revenue exceeds ETH, is Conflux worth mining?

Under the Conflux token inflation model, if there is no ecological value support similar to Ethereum, the currency price is difficult to maintain.

Original title: “Understand the mining logic of Tsinghua’s strongest project, Conflux, are graphics card miners worth mining? 》
Written by: miaohash

Recently, Ethereum 2.0 will be launched on December 1st in the news screen currency circle. The launch of ETH 2.0 means that the PoS mining function will be officially launched. Although it will take a long time for Ethereum 2.0 to completely abandon PoW, it is still a long-term negative for graphics miners to some extent.

However, the star project Conflux, which was launched at the end of October, still chose PoW as the consensus mechanism, and many graphics card miners also began to bet their computing power on their token CFX. Conflux is the strongest project of the Tsinghua Department, with Mr. Yao Qizhi as a consultant endorsing it, and the team is mostly Yao class students who are the strongest in the field of AI in China. Investors include Sequoia, Baidu, Yuchi and Huobi, which seems to be able to break the “Tsinghua Department” coins Circle of bad reputation.

What’s interesting is that CFX has not yet been launched on any mainstream exchanges, and it is the first launch of MoonDEX, a decentralized exchange in the Conflux ecosystem. Although some small firms have begun to gain strength, Huobi, which has invested in CFX, may be launched later if nothing unexpected happens (unless affected by recent investigations).

For graphics card miners who are used to mining, selling and mining, betting on the opportunity cost of rising ETH to mine CFX, can they really make money?

CFX’s recent mining revenue outperforms ETH

Conflux supports GPU mining, but the graphics card requires 6G or more. At present, the cost of assembling an 8-card 3070 mining machine is more than 30,000 yuan. Calculated at the price of ETH 440 US dollars, the net profit of a single machine is 70 yuan/day. It is expected to pay back in 13 months. Considering that the graphics card has more than 30% disabled In the case of value, it is expected to pay back more than 9 months.

But for Conflux, if calculated according to the static calculation on November 8th at the time of writing, under the same machine parameters and calculated at the current CFX 0.09 USD currency price, the net income of CFX can reach 100 yuan/day, and it is estimated that 10 The monthly payback period, and considering the residual value, the payback period is about 7 months.

In addition, two days after the main network was launched, Conflux’s entire network computing power was less than 1/2 of the current one, and the mining revenue was even more exaggerated. The net profit of an 8-card 3070 can reach 200 yuan/day.

Despite this, mining CFX is not as profitable as expected, but the income can still outperform other PoW coins, so it can also be seen that the mining difficulty and computing power of Conflux are increasing rapidly. However, the prerequisite for maintaining current earnings is that under static computing power, the CFX currency price is not less than 0.066 USD/unit, or if the computing power continues to increase by 1 times, the currency price is not less than 0.13 USD/unit, otherwise CFX mining revenue will not be able to outperform ETH.

However, for miners who are sensitive to the price of the shutdown currency, the current shutdown currency price of CFX is only about 0.017 US dollars, so there is no need to worry about mining disasters in the short term.

At present, CFX has the largest trading volume on MoonDEX. Although the currency price has reached the highest value of US$0.1, the average daily trading volume is only US$80,000. Excluding market-making funds, the exchange does not have sufficient trading depth, and miners may mainly ship off-market at this stage.

Selling pressure below $0.1 is small, and miners have a winning side

The initial number of CFX is 5 billion. After Conflux goes online, the monthly fixed selling pressure mainly comes from private equity investors and the Conflux Foundation. These tokens account for 12% and 4% of the initial number of tokens, respectively. It will be unlocked within 2 years, and the founding team, community and ecological fund tokens accounted for 84% of the initial total. These two parts of tokens can be unlocked in batches within 4 years.

In addition to miners, private equity investors are the most likely to sell currency holders in the short term. According to CFX’s early unlocking rules:

It can be seen that the tokens of private equity investors will accelerate the unlocking as the price of the currency rises to the above-mentioned price, and there is an invisible price upper limit, which will put the currency price under pressure. The CFX private placement price is 0.1 U.S. dollars. Therefore, when the currency price is lower than 0.1 U.S. dollars, all currency holders may lack the motivation to sell. At present, the token sellers on the market are mainly miners with very little circulation, so it can even be seen that some investors are quietly acquiring CFX off the market. Combined with the above calculations, the current CFX miners who enter the mining site ($0.09 at the time of writing) have a good fund safety mat, and the mainstream institutions have not yet listed the currency, and the short-term currency wins are large.

CFX still needs to be paid by retail investors

Fortunately, as a million gold oil card, miners can cut off their computing power at any time in the event of a mining disaster, without taking too much risk, but whether it is officially held tokens or tokens in the hands of miners, eventually It will still flow to the market, and the seller’s income will be paid by retail investors.

The amount of tokens unlocked in the next few years will be a significant number. Calculated at 0.1 U.S. dollars, the initial token market value is 500 million U.S. dollars. If calculated at 1 U.S. dollars, the market value is 5 billion U.S. dollars. In addition, Conflux produces 2 blocks per second, so there are approximately 6,3072,000 blocks per year. The block reward for the first 4 years is about 7 CFX, and the inflation rate is around 8.83%. This will lead to further accumulation of CFX selling pressure. Generally, under the token inflation model, if there is no ecological value support similar to Ethereum, the currency price is difficult to maintain, and it may even enter a long-term decline in the currency price like EOS.

Therefore, if there are miners who want to keep the currency for a long time, they still need to pay attention to each unlocking time point and the ecological activity of the project to avoid the loss outweigh the gain.

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