The Canadian miner recently purchased $30 million worth of Nvidia’s crypto-focused graphics cards (GPUs) to mine ether and other cryptocurrencies. Hut 8’s Cryptocurrency Mining Processors (CMPs, as Nvidia has branded them), will utilize Luxor’s Switch software to flip between ether and other coins that use the SHA-256 hashing algorithm (same that’s used for bitcoin).
Hut 8 will host the hardware themselves but will rely on Luxor for software and hashrate management, per the agreement.
“Institutional miners are looking for profit-switching algorithms to access deeper hashrate liquidity and get best point-in-time execution for their hashrate. Leveraging multiple blockchains, venues and MEV opportunities, Luxor Switch can deliver top miners, such as Hut 8 with extra return for their hashrate,” Luxor CFO Ethan Vera told CoinDesk.
Ethereum’s DeFi summer of 2020 and NFT spring of 2021 have been boons for miners, as transaction fees on the network ballooned alongside token valuations.
Developers recently approved an Ethereum Improvement Proposal for activation this July which would burn ETH transaction fees, a change that has been met with celebration from ETH users and exasperation from miners.