Poolin, one of the largest Bitcoin mining pools by hash rate, has announced it will be issuing IOU tokens in an effort to “minimize the impact of withdrawal suspension” for users.
In a Tuesday blog post, Poolin said its wallet service will be releasing IOU ERC-20 tokens for users unable to withdraw their Bitcoin (BTC), Ether (ETH), Tether (USDT), Litecoin (LTC), Zcash (ZEC), and Dogecoin (DOGE) holdings. On Sept. 15, the mining pool will issue IOUBTC, IOUETH, IOUUSDT, IOULTC, IOUZEC, and IOUDoge, respectively, at a 1:1 ratio based on users’ holdings following the suspension of withdrawals due to reported “liquidity problems.”
“Our priority, for the time being, is to resume withdrawals of as many coins/tokens as possible,” said Poolin. “The company now is striving for multiple solutions to solve the short-term shortage of liquidity, including seeking new investments, debt-equity swaps, and assets liquidating.”
According to Poolin, users will have the number of original tokens in their assets and mining accounts “set to zero” following the issuance of IOUs, which the mining pool claimed could be withdrawn at any time automatically. In addition, the platform said it planned to eventually burn all the IOUs after users were given the opportunity to trade them back for their original tokens on chain or with third parties, buy mining rigs, or purchase shares in Poolin’s U.S. company.
Related: Bitcoin mining revenue jumps 68.6% from the lowest-earning day of 2022
Other platforms have taken a similar approach — releasing IOU tokens — when faced with liquidity problems. In 2021, DeFi transaction combination tool Furucombo suffered an exploit which cost the protocol $15 million, later issuing 5 million iouCOMBO tokens as part of a compensation plan for victims.
Launched in 2017, Poolin is a China-based mining pool that operates under Blockin. According to data from BTC.com, the firm was responsible for roughly 10.6% of the BTC blocks mined over the previous 12 months, coming in as the fifth-largest mining pool behind Foundry USA, AntPool, F2Pool, and Binance Pool.