Poolin, the embattled crypto mining pool service provider, will offer freshly-minted IOU tokens to its users whose assets are frozen after the platform suspended withdrawals last week.
The distribution of IOU tokens will be made today, the 15th of September.
Poolin’s IOU Tokens
The IOUs will be minted under the ERC-20 protocol on Ethereum, the China-based company said in an official statement on its website.
“The team has come up with the IOU-tokens scheme to minimize the impact of withdrawal suspension. The tokenomics of IOU-tokens will bring intuitive & various options and easy-to-use operations,” Poolin said in its statement.
Poolin accounted for 10.6% of all BTC blocks mined in the last 12 months, making it the fifth-largest mining pool after Foundry USA, AntPool, F2Pool, and Binance Pool.
“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,” the company said.
Poolin Halts Withdrawal
Last week, the firm suspended withdrawals, flash trade, and internal transfers in the face of mass withdrawals threatening to wipe off liquidity and disrupt operations. It said that extreme step was taken to preserve liquidity and work towards finding a solution to the liquidity crisis.
The company also introduced two zero-fee mining schemes to encourage users to continue using its mining pool services in a bid to shore up the supply of liquidity on its platform.
It also announced that users’ holdings are safe with the platform as its net worth is still positive. Besides, Poolin said newly mined BTC and ETH will be paid out daily.
Issued in a 1:1 ratio, there would be six different IOU tokens – IOUBTC, IOUETH, IOUUSDT, IOULTC, IOUZEC, and IOUDOGE – representing BTC, ETH, USDT, LTC, ZEC, and DOGE. Poolin users will receive the same number of IOU tokens as their holdings in the Asset Account of the Mining Pool Account. For example, a user having 20 BTC and 50 ETH in their asset or mining pool account will be given 20IOUBTC and 50IOUETH.
After receiving the IOU tokens, users’ original holdings will be set to zero. They can withdraw the new assets automatically unlimited times. Eventually, the IOU tokens will be burned after users are allowed to trade them back for the original ones. Users can also choose to buy mining rigs or shares in Poolin’s US arm.