MiFi: Where mining meets finance

[GENERAL] Summarize your solution to the problem.

Our project is backed by mining machines and consists of 3 layers:  

• Cost-efficient mining 
• Smart portfolio rebalancing 
• Defi layer 

With a long term goal to bring mining to the insurance sector.

[GENERAL] Summarize your relevant experience.

Our team has multiple years' experience across crypto and traditional finance. The core team consists of mining experts, hedge fund trading engineer, defi & marketing expert and crypto-specialized attorney with an eye to ESG policies and compliance. 

[GENERAL] Requested funds in USD.

[IMPACT] Please describe your proposed solution.

Our project democratizes access to mining and bridges the gap between the traditional insurance sector and defi by offering fair opportunities to people, for participating in mining and our revenue-generating activities, with the long-teram goal to integrate the protocol into insurance.

Our protocol consists of three layers:

1.Cost-efficient mining

Our team has deep knowledge and connections across the mining industry. Thanks to this broad experience, we strive to always strike the best deals in terms of mining machines, electricity and hosting, maximizing the returns. Likewise, given the extreme variability of the mining equipment’s prices, we gain and hedge over the market by applying a profit-focused purchasing strategy for mining devices from the beginning of a cryptocurrency lifecycle.

2.Smart portolio rebalancing

The MiFi protocol is designed to mine a basket of PoW cryptocurrencies (Bitcoin and selected Altcoins) and periodically convert Altcoins to Bitcoin (BTC). This strategy is generated through a

profitability study, which proved that Altcoin mining and conversion in BTC outperformed simple BTC mining by 3x.

Mining Altcoins is more capital-efficient, and their mining device’s price is lower and more stable than those needed for mining BTC. MiFi applies a data-proofed methodology for Altcoin selection and swap. In each mining pool, there is a predefined number of coins; once the pool is filled, the swapping happens based on an algorithm which determines the conversion rate of altcoin to BTC or to stablecoin. This mining diversification gives the MiFi protocol a hedge when BTC price drops to a mining break-even point.

3.Defi layer

The MiFi protocol will launch its native token as a vehicle to participate in the protocol and to develop further integration with other DeFi protocols. A dedicated Dapp will work as a front-end to interact with the protocol with a frictionless user experience. 

The Dapp will be running on the Cardano blockchain. It will enable matching of user’s Cardano and BTC wallet, MiFi token staking, BTC rewards accounting and distribution. Token holders can stake the MiFi tokens on the Dapp to receive the rewards in BTC directly in their BTC wallet. 

Cardano and BTC networks are both based on the Unspent Transaction Output (UTXO) model. We want to leverage the strengths of decentralization, security and low fee offered by the Cardano network. 

We’ve consulted the specialized Haskell development firms for feasibility study and got positive feedback. The dapp can be created and delivered within a limited development time.

We will be the first mining protocol to launch on Cardano. The unique value proposition of MiFi has brought attention from institutions and the general public. Among them are entities and people who are not familiar with Cardano yet. We expect to bring a new audience and liquidity into the Cardano ecosystem.

The protocol’s revenue share model is 80% to users, 20% to protocol treasury, which will be re-invested into business operation and expansion. For incentivizing long-term staking, the protocol concedes part of its revenue share (80%) and gives them to users as an extra reward.

More details in the Light Paper

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The challenges we’ve outlined:

1.Mining’s complexity and high investment leave non-professional investors out of the game

Solution: fractionalize the entry ticket in mining and cancel all the technical barriers by using the MiFi token and the dapp for token staking and revenue share.

2.Remaining in profit during market dump

Solution: we diversify mining in different altcoins and continuously search for locations where energy costs are cheaper. Also, given the extreme variability of the mining equipment’s prices, we gain and hedge over the market from the beginning of a cryptocurrency lifecycle by applying a profit-focused purchasing strategy for mining devices.

3.Renovate the outdated insurance sector

Solution: in the long term, our protocol treasury will be used to back the Insurtech layer. MiFi protocol will have a new product as an insurance broker.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Profitability when BTC price drops

When BTC price drops to a mining rig's shutdown price, mining is not profitable. To hedge this risk, we mine altcoins to stay afloat and increase profitability. We continuously search for locations where the energy cost is cheaper.

Security risk

Various factors can compromise the security of the procotol. To reduce this risk to the minimum level, we design a robust custody strategy comprising third-party professional custody and multi-sig.

Rising mining difficulty

For this predictable challenge, our strategy is to deploy as many hashrate as possible when BTC price falls (now). And optimize electricity costs by searching for locations with advantageous energy cost rates.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Stage 1: Activate the mining machines.

The mining starts as soon as we receive the first round of funding. By activating mining, we also begin generating revenue.

Duration: ongoing

Stage 2: Dapp development.

The funds for dapp development can come from our other fundraising activities and mining revenue.

Duration: estimated 3 - 4 months, including audit.

Stage 3: Protocol launch.

This marks the official launch of our protocol on the Cardano mainnet. Users will be able to stake the MiFi tokens on the dapp and claim the rewards.

[FEASIBILITY] Please provide a detailed budget breakdown.

Requested budget: $65000

The entire sum will be invested into 50 units of NVIDIA RTX 3080TI 12GB GDDR6X 384-bit., graphic cards for altcoin mining.

Subsequently, we use the revenues for other expenses.

[FEASIBILITY] Please provide details of the people who will work on the project.

Francesco Madonna, CEO: track record of successful investment in real estate, bitcoin early adopter https://twitter.com/CiccioMadonna

Luciano Canzanella, Mining expert: multiple years’ experience and connections across the mining industry. https://www.linkedin.com/in/luciano-canzanella/

Paolo Musumeci,CFO : Chartered Accountant specialized in crypto management. Deemed appointable to receive a EU license to open a crypto fund. https://www.linkedin.com/in/paolo-musumeci-1126ab11/

Ade Adedeji: Software Engineer building trading desks for Hedge Funds in NY, USA

Xian Zhang, Chief Growth Officer: 10 years experience in business development and marketing in B2B&B2C, already working in Cardano ecosystem https://www.linkedin.com/in/xian-z-5534143b/

Marco Zolla, Legal & Compliance: crypto-specialized attorney with an eye to ESG policies and compliance.https://www.linkedin.com/in/marco-zolla-057a0651/

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Yes. This round’s funding will be used to kick start the mining rigs. We may apply for another round for funding the dapp development.

We may need initial capital until the launch of the protocol. After that, our business will be self-sufficient thanks to the mining revenue.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

The first stage will be activating mining. We will publish the mining performance on our webiste and blog regarding the following indicators:

• Amount of machines 
• Amount of hashrate deployed in each category

At a later stage we will publish also

• Location sites
• Containers
• Amount and type of energy used

The second stage will be Dapp development. For this, we will publish Github statistics and technical progress updates.

The third stage will be the protocol launch. We will measure primarily TVL (Total Value Locked) and Rewards distributed by then. 

[AUDITABILITY] What does success for this project look like?

The success of this project will reach these goals:

Democratize mining resources and participation. The general public has easy access to participate in mining and benefits from it long-term.

Mining gains the perception among the public as a safe and sustainable investment and a valuable contribution to the network.

Renovate the traditional finance by mining solutions. By leveraging the brilliant mix of safety and profitability, our protocol aims to build Insurtech and Fintech applications to serve the outdated traditional finance sector, particularly the health insurance space. The right to access convenient and adequate health insurance represents a human right. We strive to reach this goal by acting as an insurance broker to offer better conditions and deals.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is an entirely new proposal.

Sustainable Development Goals (SDG) Rating

In the long term, We aim to build an additional layer based on solar panels. Such a layer will be helpful to partially de-risk the bitcoins revenues on a physical asset which generates a yield and produces electricity for the mining devices. Hence, we aim to create a circular economy.

SDG goals:

Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all

SDG subgoals:

7.2 By 2030, increase substantially the share of renewable energy in the global energy mix

Key Performance Indicator (KPI):

7.2.1 Renewable energy share in the total final energy consumption

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