Hong Kong-based cryptocurrency exchange Coinsuper officially announced yesterday that “transaction mining” will be suspended effective August 30, 2018. The announcement stated after it’s initial launch on July 16, 2018, “we notice that the current transaction mining model evidently appears to be a short-term approach,” and some miners sold directly after Coinsuper’s platform token CEN was unlocked, which put even more short-term pressure on prices.
Transaction mining was launched in May 2018 by another cryptocurrency exchange, FCoin. This model immediately triggered a wave of enthusiasm in the cryptocurrency circle and made FCoin the world’s highest exchange. Since the users get tokens issued by these exchanges on a pro-rata basis, the transaction fees of the entire platform are repaid to the holders of the currency.
Originally, this method wanted to use dividends to attract a large number of users and the regular issuance of rebates was intended to allow users to continue to hold tokens. However, when the cryptocurrency market weakened, a number of “trade miners” sold their tokens once they were unlocked to them. Coinsuper also acknowledged this fact in the announcement. The press release also indicated that a series of measures will be launched to strengthen community construction and increase the application scenario of CEN.
Lai Yuqin, the founder of blockchain consultant and investment company BlackHorse Group, said that basically, the trading model is difficult to maintain. “No cryptocurrency goes up and not down, it will eventually fall into a death spiral.” There are many people who buy tokens, and this model had problems from its roots.
Matter of fact, FCoin’s FCoin Token (FT) price has continued to fall after the wave of transaction mining. The price has fallen more than 70% in the past month. As for Coinsuper’s platform currency CEN against Bitcoin, it also fell more than 90% from the highest level. It can be seen that the pressure on both is quite heavy.