The Protocol: Bitcoin Mining Faces New Challenges As Power Costs Eat Profit

In this Issue:

• Bitcoin Mining Faces ‘Incredibly Difficult’ Market as Power Becomes the Real Currency
• Bitcoin Liquid Staking Gaves Momentum As Lombard Launches Bard Token and Foundation
• Optimism Taps Flashbots to Supercharge Op Stack Sequencing
• Hemi Labs Raises $ 15m to Expand Bitcoin Programmability

Network NewsBitcoin Mining Players Face Challenging Market: Bitcoin Mines have long been defined by the boom-and-bust rhythm of the four-year Halving Cycle. But The Game Has Now Changed, Some of the Industry’s MOST PROMINENT EXECUTIVES SAID at the Salt Conference in Jackson Hole Earlier this Week. The Rise of Exchange-Traded Funds, Surging Demand for Power and The Prospact of Artificial Intelligence “We used to come and talk about Hash Rate,” SAID MATT SCHULTZ, CEO OF CLEANSPARK. “NOW We’re Talking About How to Monetize Megawatts.” For Years, Mining Companies – Whose Revenue Derived Mainly from Production Bitcoin – Lived and Died by the Halning Cycle. Every Four Years, Rewards Were Slashed in Half and Mines Scrambled to Cut Costs or Scale Up To Survive. According to these executives, that rhythm no longer defines the business. “The Four-Year Cycle is Effectiely Broken with the mattration of bitcoin as a strategic asset, with the etf and now the strategic Treasury and whatnot,“ Schultz Said. “The Adoption Is Driving Demand. If You Read Anything About the MOST RECENT ETF, they’ve Consumened Infinitely More Bitcoin Than Have Been Genered So Far This Year.” Cleanspark, WHICH NOW OPERATES 800 Megawatts of Energy Infrastructure and Has Another 1.2 Gigawatts in Development, Has Begun Turning ITS Attcture Beynd Proof-F-F. “Our Speed ​​to Market with the Electricity have been created Opportunities Such that now we have a look at hows to monetize Power Beyond Just Bitcoin Mining,” HE Said. “WITH 33 Locations, We Now Have A Great Deal More Flexivity Than We Ever Did Before.” Schultz is not Alone in Calling The Industry’s Shift in Business Model. Patrick Fleury, CFO of Terawulf, Echoed the Sentiment and Didn’t Sugarcoat the Profit Squueze of the Mines Are Feeling. “Bitcoin Mining is an incredibly difficult Business,“ He Said. He Broke Down The Economics of Bitcoin Mining in Straightforward Terms: With Electricity Costing Five Cents per Kilowatt Hour, It Currently Costs Around AT A BITCOIN PRICE OF $ 115,000, that Means Half the Revenue is Consumened by Power Alone. Once Corporate Expenses and Other Operation Costs Are Factored In, The Margins Tighten Quickly. In his view, profitability in mining hinges Almost Entirely on Securing Ultra-Low-Cost Power. – Helene Braun Read More.

Bitcoin Liquid Staking Rises: For MOST OF ITS HISTORY, BITCOIN HAS BEEN TOUNED BY ITS SUPPORTers As Digital Gold: An Asset To Hold Racher Than Use. That passivity has left trillions of dollars’ wort of btc sitting IDLE in Wallets, Disconnected from the Yield Strategies and Composivity that Defentralized Finance (Defi). The rise of liquid sting tokens promises to change that, positioning bitcoin not only as a of Value But As A Productive Asset Integrated Into on -chain Capital Markets. Liquid Staking Allows Users to Offer The Crypto to Help Secure a Network and Receive in Return a Liquid Earning Staking Rewards. Lombard Finance Has Emerged As One of the Prominent Projects in Bitcoin Liquid Staking. ITS FLAGSIP PRODUCT, LBTC, IS A YIELD-BEARING TOKEN BACKED 1: 1 by BTC. WHEN BTC IS DEPOSITED INTO The LOMBARD PROTOCOL, The UNDERLYING COINS ARE STAKED, PRIMARY VIA BABYLON, A PROTOCOL Enabling Trustless, Self-Custodial Bitcoin Staking. USers Receive LBTC IN RETURN, WHICH CAN BE DEPLOYED ACROSSSYSYSTEMS WHILE THE ORIGinal Bitcoin Earns Staking Rewards. This Dual Functionality Is Key. Holders Can Keep Exposure to Bitcoin While Using LBTC in Lending, Borrowing and Liquing Provision Across Protocols Such As Aave, Morpho, PENDLE AND Ether.fi. Designed for Interperaperability, LBTC MOVES ACROSS EHEREUM, BASE, BNB Chain and other Networks, Preventing Liquidity Fragmenation and Enzuring Bitcoin Cana. – Jamie crawley Read More.

Optimism and Flashbots Team Up: Optimism is Teaming up with Flashbots to Revamp Howa Transactions Are Processed Across Itck EcoSystem, Aiming to Make Somemes The Partnership Centers on Sequencing, The Behind-The-Scenes Process That Determins How Quickly A Transaction Confirms, WHICH Trades Are Prioritized, and How Much Ultimately Pay. Optimism Says Flashbots’ Infrastructure, WHICH IS ALREADY Responsible for Building More than 90% of Ethereum’s Blocks, Will Now Bring Near-Instant Confires. Chain in the so-called Superchain.This matters of the Op Stack Underpins More than 60% of All Ethereum Layer-2 Activity Unichain, World Chain, Ink and Soneium. UNTIL NOW, Advanced Sequencing Features Such as Ultra-Fast Settlement, Frontrunning Protection and Custom Compliance Rules Were Available Only to The Largest Chains while. With Flashbots on Board, Those Features Will Be Available Via Tools for Any Project Building on Optimism’s Op Stack. – Margaux nijkerk Read More.

Hemi Labs Raises $ 15 Million: Hemi Labs, The Bitcoin Programmmability Network Founded by Jeff Garzik, Raised $ 15 Million in Funding to Accelerate Development and Expand ITS EcoSystem. The Round Included Yzi Labs (Formerly Binance Labs), Republic Digital, Hyperchain Capital, Breyer Capital, Big Brain Holdings, Crypto.com and others Funds Will Support Applications for Borrowing, Lending and Trading on Bitcoin While Further Developing Its Hemi Virtual Machine (HVM) DECENTRALIZED SYSTEM THAT CAN Execute Smart Contracts and Process Transactions on Ethereum. – Jamie crawley Read More.

In Other News

• Aave Labs Introduced Horizon, A NEW PLATFORM DEDICATED FOR INSTITATIONAL BORROWERS TO Access Stablecoins Using Tokenized Versions of Real-World Assets (Rwas) Like US Treasures. AT LAUNCH, INSTITATIONS WILL BE ABLE TO BORROW CIRCLE’S USDC, Ripple’s Rlusd and Aave’s Gho Ogainst A Set of Tokenized Assets, Including Superstate’s Short-Duration US Treasury Circle’s Yield Fund, and Centrifuge’s Tokenized Janus Henderson Products. The Platform Aims to Offer Qualified Investors Short-Term Finance on Their Rwa Holdings and ALLOW THEM TO DEPLY YIELD STRATEGIES. – Kristzian Sandor Read More.
• Google Cloud Is Moving Forward with Plans to Launch It Own Layer-1 Blockchain, Positioning The Network As Neutral Infrastructure for Global Finance at A Time Fintech Competitions Ledgers. In a Linkedin Post Published Tuesday, Rich Widmann, Google’s Head of Web3 Strategy, Provides Fresh Details on the Project, Known As The Google Cloud Universal Ledger (GCul). He Descrved The Platform As A Credibly Neutral, High-Performance Blockchain Designed For Institutions, Supporting Python-Based Smart Contragraphs to Make ITeCesible Tovbleers. “Any Financial Institution Can Build With Gcul,” Widmann SAID, Arguing that While Companies Like Tether May Be Unlikely to Adopt Circle’s BlockCchain and Paye’e Firms Like Like. Neutral Infrastructure Removes Those Barriers. – Siamak Masnavi Read More.

Regulatory and Policy

• The Crypto Industry’s Washington Lobbyists are Trying to Draw a Line in the Sand Over The Market Structure Bill that’s Steaming Through The US Senate, Saying they Can From Being Held Responsible for Bad Actors Abascing their Technology. The Industry Made ITS CASE to the Senate’s Banking and Agriculture Committees “with One Voice,” Sending a Letter Wednesday Sigrated by Coinbase, Krake, Ripple, A16Z, Unisap, Unisa. Crypto Businesses and Organizations, Including Almost All of the Major US Lobbying Groups. This unified Effort Comes the Week Before The Senate Gets Back to Work, and Is Likely to Rekindle Full Negotias on the Language of the Legislation that RepreSents of the Industry’s. – Jesse Hamilton Read More.
• The US Commodity Futures Trading Commission Is About to Drop To a Single Commissioner When Democrat Kristin Johnson Leaves of Trump’s Chairman Nominee, Brian Quintenz. As of Sept. 3, The Five-Member Commission Will Drop to One, Because that’s WHEN Johnson Plans to Exit. “In Advancing An Agenda in the Name of Growth, It Is Critical Not to Disanel the Foundational Ressilienance That Supports Financial Stability and Protects of The Broader Economy,” Sheoid in Saida. Agency to Stick to the Fundamentals as New Technologies Come on Board. – Jesse Hamilton Read More.

Calendar

• Sept. 22-28: Korea Blockchain Week, Seoul
• Oct. 1-2: Token2049, Singapore
• Oct. 13-15: Digital Asset Summit, London
• Oct. 16-17: Europe Blockchain Convention, Barcelona
• Nov. 17-22: Devconnect, Buenos Aires
• Dec. 11-13: Solana BreakPoint, Abu Dhabi
• Feb. 10-12, 2026: Consensus, Hong Kong
• May 5-7, 2026: Consensus, Miami