Behind The Code EP10: Mined.Fi

DePIN stands for Decentralized Physical Infrastructure Networks. For those who are not familiar with DePIN, it is essentially just Physical Infrastructure + Blockchain Technology, tapping into benefits like privacy, permanence, and global participation. Since its conception, DePIN has branched out into many different use cases. The best example is Decentralized Data Storage, with Filecoin (FIL) leading the way in 2017. Now, a more advanced model is used to store NFT images on Arweave (AR), and a popular NFT marketplace on Alephium called Alphaga is using that particular network. Another example, which gained popularity last year, is Render Network (RNDR), a Decentralized GPU Computing Network. Its popularity grew along with AI, which depends heavily on powerful GPU computations.

DePIN is one of the strongest use cases of blockchain technology, and following these projects could be very beneficial. The only drawback is that there are many of them. For a more comprehensive guide on DePIN, please check out this post by Tom Dunleavy, a former Senior Analyst at Messari:

Now on to the juicy part. mined.fi (formerly known as Alphmine) is a DePIN project—a liquid mining platform that democratizes ASIC mining by decentralizing operations and redistributing mining rewards to individuals via vaults. The platform is scalable to any PoW coins and allows users to stake tokens in vaults with just a few clicks to earn rewards. Essentially, mined.fi connects mining operators with users by providing financial capital to miners, collecting mining rewards, and redistributing them to users.

What sets mined.fi apart is their vision/promise of newbie-friendly design. No mining hardware or technical expertise is required, making it accessible to the average user, or at least to a Web3 user.

“Sustainability is central to our mission: we aim to power all mining operations exclusively with green energy and employ carbon offsetting solutions when not available.” - mined.fi team

As a former ALPH miner myself, this is something I personally would love to see flourish and be part of.

Now lets get in to the interview!

Dina, thanks for accepting our interview. Let’s start with the basics. Can you tell us who you are, your background, and how you got into crypto?

Hi, thank you for having me, it's a great pleasure! I’m a growth professional with over six years of experience in Business Development, Marketing, and Growth, and I’ve been working in Web3 for almost four years now. I first got into crypto while still at university. I started exploring crypto with two friends, and what fascinated me most were the core blockchain principles and its disruptive potential. While we’re not fully there yet, I’m optimistic about future use cases that will bring positive societal externalities.

About mined.fi, how many of you are on the team? How and where did you meet each other, and on which chain did you first start developing? How did you decide to build on Alephium?

Mined.fi still has a very small team, with just four people since we kickstarted the project six weeks ago. The team formed quite organically, as we all knew at least one other person from the group.

The project grew out of synergies with Hearst and a recognized need in the mining industry. As for the decision to build on Alephium, our familiarity with the Alephium team made it an easy choice to start building on their chain.

Let's talk about your DApp. Can you walk us through the thought process behind how you came up with your dApp?

Let me share the core inspiration behind mined.fi. We noticed two major problems in crypto mining: individual investors face huge barriers to entry - needing hundreds of thousands in capital and technical expertise - while many skilled mining operators, especially those with access to renewable energy, struggle to expand due to capital constraints.

Mined.fi bridges this gap through a DeFi protocol where investors can participate in mining with any amount while keeping their assets liquid, and operators can access capital to scale efficiently. We thought primordial to integrate renewable energy incentives because many operators have access to stranded renewable sources but lack funds to utilize them.

What really makes mined.fi unique is how we've made mining infrastructure accessible through DeFi primitives while promoting environmental responsibility. Our vault system, with its customizable parameters and built-in lending facilitation mechanism, allows operators to scale operations more efficiently than traditional financing would allow. It's not just about democratizing mining - it's about making it more sustainable and efficient.

Is there a mined.fi token built into the protocol?

Yes, it’s called $MINE and will function as both a governance and utility token. Users will need to stake $MINE in our Safety Module to gain voting rights, pay platform fees, and earn rewards. Staking $MINE is also required for vault operators to propose the creation of a new vault, and hence the issuance of new Liquid Mining Tokens (LMTs).

You mentioned the Safety Module. What is it?

The mined.fi Safety Module (MSM) is a key security feature designed to protect stakers' principal from shortfall events like unexpected losses or market downturns. It safeguards the protocol by setting aside 25% of the total locked supply, which can be sold or borrowed against to cover potential losses.

Users can stake MINE tokens in the MSM, contributing to the protocol's security while earning rewards. This mechanism provides flexibility in addressing various levels of risk, creating a buffer to absorb losses without directly affecting users' principal investments.

What about team funding and infrastructure costs? How are you going to manage that?

We received a grant to kickstart the project, covering infrastructure, operations, and MVP development. Our next milestone is the private sale, which will help launch and expand the project. Additionally, the protocol is designed to autonomously and automatically manage the resources needed to operate and maintain the infrastructure via smart contracts. Those financial resources will be allocated to the mining teams directly via the vaults.

The DAO will decide on the expansion of mining infrastructure and other general, key decisions regarding protocol expansion and operations. It will validate decisions and allocate the respective resources accordingly.

Explain like I'm 5: What is mined.fi? Why do we need it? Is it for miners, regular hodlers, or both?

Imagine a store called mined.fi with different piggy banks, each requiring you to leave your coins inside for a set period. The longer the stake time, the more extra coins you’ll earn. While your coins are staked, you’ll receive special tokens based on how much you’ve deposited. Once you want to withdraw, you can exchange those tokens for your original coins plus the extra ones.

The extra coins are created by expensive machines that you and I can’t afford. Only bigger companies or groups of people can buy these machines, so only they could previously earn the extra coins.

We need the mined.fi store if people like you and me want to earn those extra coins. mined.fi buys the machines, earns the extra coins, and puts them into the piggy banks so we can also get a share.

The mined.fi store is open to everyone—you don’t need any machines or knowledge of how they work. Simply bring your coins and choose the piggy bank you want.

Are there any existing DApps from other chains that you took inspiration from? Or could you share with us similar implementations of your DApp?

Yes, we’ve drawn inspiration from several DApps on other chains. Staking protocols like the very successful Liqud Staking protocol Lido and the more modular Stakewise have influenced our approach to simplifying the mining user experience for PoW coins. Additionally, we’ve taken insights from lending and borrowing protocols, particularly for building robust security mechanisms within our platform.

What other things can we expect from mined.fi? Are there any in the pipeline that you would like to share? Maybe the website launch, the whitepaper, etc.

There are some exciting developments coming up for mined.fi. Our whitepaper is already live, and we’ll soon be launching a Telegram group—starting with our close community and then expanding to the wider public. We’re also in the midst of rebranding mined.fi (previously Alphmine) and we will share a new landing page in the near future.

On the infrastructure side, we’re closing deals with mining infrastructure providers, which will be a major step forward. Additionally, we’re actively working on our MVP and the establishment of our DAO to further decentralize the project.

Let's talk about security. ALPH will be locked for a long time, a minimum of 12 months, which is a very long time in the crypto world. What are the security measures/practices set in place for this protocol so the funds remain safe? Do you usually hire third-party auditors?

Security is a top priority for us, especially since we're building liquidity pools with assets that are locked up for months. We offer different vaults with varying vesting periods to ensure liquidity isn’t overly restricted.

Considering this, we’re reviewing the vesting periods to find the right balance between unlocking too much liquidity and not enough. To keep users' funds flexible, those who commit their tokens will receive sTokens, allowing them to be used across other DeFi protocols.

Users also have the possibility to withdraw funds using the Early Withdraw function, allowing them to retrieve funds before the selected date at time of staking. This function takes a 2-5% fee on the staked tokens depending on the Vault liquidity.

Lastly, of the key security measures is the Safety Module, acting as collateral to protect users from potential shortfall events. On top of that, we’re ensuring top source code quality and recurrent audits to avoid vulnerabilities. Of course, third-party auditors will also be invited to audit our application at a later stage.

What are the main advantages and pitfalls to building on Alephium?

Building on Alephium comes with both advantages and challenges. One of the main advantages is our close connection to the Alephium team, which gives us efficient feedback loops and a fast exchange of information. This allows us to move quickly and effectively. Additionally, Alephium is highly committed to providing a smooth developer experience, which is invaluable as we build out our project. The team has been incredibly supportive of our efforts from the start.

As for pitfalls, Alephium currently has a smaller community compared to larger ecosystems, but we’re confident this will grow in the coming months as the ecosystem continues to evolve.

To those new to crypto, can you share some words of wisdom?

To newcomers: I know the space can feel overwhelming, but stick with it. There are plenty of helpful people ready to guide you. Also, using genAI, you can now break down complex protocols into simple language.

• The key is to keep learning. Follow pioneers on X, join Discord servers and TG groups of your favorite projects, and experiment with protocols using small amounts.

• Never transfer large sums until you're confident, and never share your private keys.

• Always cross-check app URLs before jumping on airdrops or giveaways, and carefully review any requests for signatures.

• Back up your recovery phrase (seed phrase) on paper and store it safely. Never store it digitally or share it with anyone, as it's the key to your wallet.

• When storing private keys and recovery phrases, be sure to distribute them across different locations, especially if storing them digitally.

• Use smart contract accounts like Safe to make it harder for someone to access your funds and to have a way to recover your accounts.

• Lastly, use Revoke Cash or any similar tool to limit app permissions and check out Trustblock, which helps users identify safe apps.

Thanks for the tip! (And noted on the genAI, I’ll start exploring that.) Lastly, Dina, when is the mainnet launch? 😎

The ultimate question!

While it's too early to say for sure, the team is incredibly excited to build this project. We're committed to moving quickly, driven by optimistic market signals and the strong support we're already seeing from the Alephium community, which is of course highly motivating. All I can say at this point is to follow us on X to stay up to date on mined.fi's progress. 👀

Mow: It has been a very insightful discussion, Dina. Thank you for your time.

To our readers. I hope you enjoyed this interview. Please dive deeper into their whitepaper here.

Follow their socials:

Twitter: https://x.com/mined_fi
Telegram: https://t.me/minedfi

So, the very first DePIN on Alephium is here. LFG!🥂

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