Marathon Diversifies Revenue Streams with Kaspa Mining
Marathon Digital Holdings is diversifying its revenue streams by expanding into Kaspa mining while maintaining its commitment to Bitcoin. Kaspa mining is one of several initiatives aimed at supporting proof-of-work (PoW) innovation and creating diversified revenue streams. This strategic move aligns with Marathon’s goal to support and secure leading blockchain ecosystems, according to MarathonDH.
Kaspa is a fair launch PoW digital asset with no pre-mine or ICO. Its consensus mechanism uses the GHOSTDAG protocol, allowing high transaction throughput and low confirmation times. The Kaspa network processes one block every second, providing faster transactions and potentially higher block rewards for miners. Kaspa’s directed acyclic graph (DAG) structure enables simultaneous block production, eliminating orphaned blocks.
Kaspa currently has a market cap of $3.9 billion and a daily trading volume of $65 million. Its circulating supply is 24 billion KAS, with a terminal supply capped at 28.7 billion KAS. Kaspa ranks among the top 25 digital assets by market cap and is one of the top five PoW digital assets.
Marathon’s interest in Kaspa began in May 2023, leading to the deployment of Kaspa ASICs in September 2023. Marathon purchased approximately 60 petahashes of KS3, KS5, and KS5 Pro ASICs from Bitmain. Once fully deployed, this would account for about 16% of Kaspa’s global hash rate. This expansion represents approximately 1% of Marathon’s 1,100 MW data center portfolio.
The financial impact of this expansion depends on Kaspa’s price and global hash rate. Marathon’s profit margins on Kaspa operations have been attractive, targeting up to 95% in certain cases, with current operations generating approximately $79 a day in profit per KS5 Pro ASIC, compared to $11 per BTC-mining S21.
Marathon’s Kaspa ASICs are being deployed in Texas facilities, with full energization expected in Q3 2024.
While there are no current plans to expand Kaspa operations beyond the initial order, Marathon continues to monitor the market for growth opportunities in other PoW blockchains or digital assets.
Chief Growth Officer Adam Swick emphasized the benefits of integrating Kaspa into Marathon’s portfolio, stating, “Integrating Kaspa into our digital asset compute portfolio enables us to diversify our revenue streams and improve our profitability per kilowatt-hour. Bitcoin is Bitcoin, and nothing will ever take away its unique value proposition. However, Kaspa’s innovative technology and dedicated community present a valuable opportunity for us to support and nurture proof-of-work innovation.”
Marathon remains committed to Bitcoin, holding 17,857 BTC on its balance sheet as of May 31, 2024. The company has donated $500,000 to Brink to support Bitcoin core developers and continues to support Bitcoin mining through firmware and two-phase immersion cooling (2PIC) technologies research and development.
