Articles > Neptune Dash Commences Incubation of Neptune Stake and Intends to Spin Out First Proof-of-Stake Mining Company
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Neptune Dash Technologies Corp. (TSX-V:DASH) is pleased to announce that, through a wholly-owned subsidiary named Neptune Stake Technologies Corp. (“Neptune Stake”), it has commenced incubating a proof-of-stake mining operation that will mine Ethereum, Cardano, EOS, NEO and NEM, among other digital tokens.
Proof-of-Work versus Proof-of-Stake Mining
Blockchain mining can be completed using proof-of-work or proof-of-stake protocols.
Proof-of-work is a computer algorithm that is used by a number of different cryptocurrencies for block generation, allowing blocks to be accepted by network participants. Proof-of-work is used by cryptocurrencies such as Bitcoin and others and is designed to create decentralized agreement between different nodes around adding a specific block to the blockchain. Proof-of-work protocol requires miners to solve extremely complex and computationally intense mathematical problems in order to add blocks onto the blockchains. This process produces a specific kind of data that permits verification of the block, but is time consuming and extremely energy intensive to produce.
Proof-of-stake is an alternative method to proof-of-work and enables the mining and validation of blockchain transactions based on the number of coins that have staked, which means the more coins a miner has the more mining power it possess. In other words, instead of utilizing energy to generate proof-of-work data, a proof-of-stake miner is mining a percentage of transactions that is reflective of its ownership stake. Many coins use proof-of-stake mining, including NEO and NEM and notably Ethereum and Cardano have announced that they intend to switch to proof-of-stake mining during 2018.
Advantages of Proof-of-Stake Mining
The advantages of using of proof-of-stake mining include:
- Recurring dividends: Neptune Stake will be rewarded for their service to the blockchain network through an annual dividend of mined token collected from network fees, just like proof-of-work miners. NEO currently rewards miners 4.0% and NEM rewards miners 4.5% (dividends to be awarded by Ethereum, Cardano and EOS are to be determined in protocol implementations in 2018).
- Exposure to a diversified portfolio of coins: Neptune Stake will hold a diversified portfolio of coins required for proof-of-staking mining, thus minimizing exposure to volatility of a single coin.
- No need to consume large quantities of electricity: Neptune Stake will not be required to purchase and maintain expensive hardware or pay extremely expensive electricity costs. As a result, Neptune anticipates that its proof-of-staking mining operations will be more economical given the reduced energy costs and through revenue that will be reinvested into its mining operations.
- Faster validations: proof-of-staking results in faster transactions times on the blockchain.
“While the Company did not originally plan to invest in mining, the establishment of our subsidiary to study these opportunities was the result of blockchain developments that we could not ignore. Our new subsidiary creates a unique platform through which these opportunities can be pursued and enables Neptune to scale aggressively with multiple coins in this new asset class,” stated Cale Moodie, President and CEO of Neptune.
Proposed Spin-Out of Neptune Stake
The Company believes that it is the first public company, through its wholly-owned subsidiary Neptune Stake, to use proof-of-stake mining in Canada and that Neptune Stake may develop into an independent and viable entity on its own with a unique business model from Neptune Dash. In that case, the Company may consider reorganizing its business by way of a spin-out of Neptune Stake to its shareholders through a plan of arrangement to be completed in 2018. Neptune believes this proposed transaction would build shareholder value by offering investors direct leverage to cryptocurrency prices within a diversified operational company. The completion of such plan arrangement and any listing of Neptune Stake will be subject to regulatory approval, the approval of shareholders and the Supreme Court of British Columbia.
Proposed Management Team of Neptune Stake
It is anticipated that Neptune Stake will be led by an accomplished blockchain team that is largely independent from Neptune. Additional information on the management team of Neptune Stake is forthcoming.
About Neptune Dash Technologies Corp.
Neptune Dash builds and operates Dash Masternodes and invests in Dash blockchain related technologies. Dash is a digital currency created to address Bitcoin's scaling challenges. Dash Masternodes facilitate the following functions on the Dash blockchain:
- facilitating private, peer-to-peer transactions directly between parties;
- serving as a governance function and voting on treasury disbursements of the Dash block-reward allocated to the Dash DAO (Decentralized Autonomous Organization); and
- facilitating transactions that are processed near instantly on the Dash blockchain (versus the target three minute block time for average Dash transactions).
For further information please contact:
Neptune Dash Technologies Corp.
Cale Moodie, President and CEO
620 – 1155 West Pender Street,
Vancouver, BC V6E 2P4
Phone: (604) 319-6955
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the viability of proof-of-stake mining, commencing the mining of Ethereum, EOS and Cardano, that Ethereum, EOS and Cardano will proceed with protocol implementations that include proof-of-stake mining the spin-out of Neptune Stake, shareholder, court and regulatory approval for any spin-out of Neptune Stake; the Company's projected asset allocations; business strategy and investment criteria; corporate governance standards applicable to cryptocurrencies; the rate of cryptocurrency adoption and the resultant effect on the growth of the global cryptocurrency market capitalization. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the construction and operation of proof-of-stake mining may not occur as currently planned, or at all; the digital currency market; the Company's ability to successfully operate Neptune Dash and Neptune Stake and securely custody digital asset coins; revenue of the Company may not increase as currently anticipated, or at all; the Company may not be able to profitably liquidate its current digital currency inventory, or at all; a decline in digital currency prices may have a significant negative impact on the Company's operations; the volatility of digital currency prices; and other related risks as more fully set out in the Listing Application of the Company dated January 15, 2018.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company's ability to complete the construction and operation of mining operations; the Company will be able to profitably liquidate its digital currency inventory if required; historical prices of digital currencies and the ability of the Company to securely custody the digital assets required to operate each proof-of-stake miner; and there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.