This upcoming product distinguishes itself from the unsuccessful endeavors of companies like BlockFi and Celsius. In contrast to these bankruptcies, Luxor’s product is firmly rooted in genuine economic production, presenting a fresh approach to Bitcoin investment. Investor returns are derived from miners sharing a portion of their profits with those who support them, rather than relying on rehypothecation.
A crucial aspect of Luxor’s strategy is the creation of a hashrate marketplace, which facilitates improved capital access for reputable miners. Hashrate is acquired at a lower price and then sold at a higher one, generating returns for investors along the way. Luxor holds Bitcoin custody only briefly, serving as an intermediary between investors and mining firms, thereby mitigating the counterparty risk associated with Luxor.
Despite this groundbreaking approach, industry figures such as Peter McCormack and Unchained CEO Joe Kelly have expressed reservations and advised caution due to the volatile nature of the Bitcoin lending market. In response to these concerns, Luxor is implementing risk-mitigation measures, including conducting due diligence checks on investors and potentially requiring miners to have insurance.
Nevertheless, Luxor Technology has not yet disclosed a specific release date for this new product. The company remains dedicated to transparency and risk management as it prepares for its launch.