As you may be aware, management has temporarily decided to suspend distributions of ETH from the Fund to address current stress conditions. This is further discussed below.
We continue to work diligently on the cave. As of the June 12 update, we were hashing ~30K, however this rate was not consistent given the unfortunate “perfect storm” brought on by this year’s brutal heatwave and our need to react to it in cave design and operations to address cooling and airflow issues. Part of our response was to intermittently shut down and then re-start to cool things down. This is why, if you were following nanopool, you witnessed such inconsistency. At this point, we are now hashing fairly consistently between 45-50K as you can see here at the Fund’s Nanopool address: https://eth.nanopool.org/account/0x749750715595f35a11d9436b6441aa643a2083aa. The dips can be attributed to periodic resets and/or shut offs when the outdoor temperatures approached the upper 80s and 90s.
Presently, there is 25 tons of AC pumping in from an outside unit. The cave landlords are planning to install a rooftop unit, so the outside unit is our only option until that is installed. Although we have been told by the landlord August for this rooftop unit, in reality this timeframe might be a bit aggressive. There are also two 1.5-ton units in the cave working 24/7. Overall, the ambient temperature and card temperatures have largely come down to acceptable levels.
The legacy rigs have been taken down, cleaned, reflashed and rehung on the main racks. In addition to increased hashrate, they are now drawing lower power. Presently, there are 220-230 rigs running fairly efficiently.
We are aiming for 60K hashrate shortly.
We had hoped for a stronger market price recovery as ETH hit $500 earlier in the week, however it has since retreated. You can view our present ETH balance at anytime here: https://etherscan.io/address/0x749750715595f35a11d9436b6441aa643a2083aa
Management has carefully considered moving to and building out a second facility for the antminers. Given market conditions and the cost of infrastructure, however, we have paused on those plans. We are presently exploring the potential to host/co-locate the antminers in another state with lower ($.035-.05 kwh) electricity cost. We are treading cautiously around all of these options simply given where the market is and hoping to negotiate a very favorable agreement with a hosting provider if that direction is chosen.
Building out the cave and sustaining efficient operations have proven to be quite challenging. Generally, it has taken longer, infrastructure and components have cost more and market prices have gone down further than we anticipated and hoped for. The cave itself is rather beautiful – clean, generally running well and overall an impressive technical feat. However, even despite management’s decision to temporarily suspend management fees and distributions, the Fund is still behind economically in terms of its distributions to investors.
At this time, and in preparation for a meeting with investors that we plan to organize in early/mid September, we are digging deep into the numbers, projections – which include what has been invested in the operation, difficulty, market prices and volatility. Our goal is to provide updated and current information into where we are presently and what our recommendations are going forward.
These recommendations will reflect our consideration of all relevant factors and options including, for example:
- Best uses of existing cash reserves – we have a back wall available now, however is using the existing reserves to build it out going to be the best use of funds?
- Best use of antminers – sell them or host elsewhere?
- Options in and around continuing to build-out the cave, including the entirety of the second room.
- The potential for using future reserves (if any) to fund construction of additional rigs to extend the life of the cave as far as possible into the future.
- Expectations for future distributions.
- Other strategic considerations.
Management remains dedicated and united in doing what is in the best interest of the investors notwithstanding changing and unforeseen operating and market circumstances.
Here are some recent cave photos. If you would like to come and visit to see progress, please let us know and we can arrange a time ASAP.