Bitcoin’s new layer-2 solution

Although at first glance, Anduro may seem similar to the Lightning Network, a secondary Bitcoin network capable of supporting economic and instant transactions, it actually has very different characteristics.

The creation of the giant Marathon Digital was in fact essentially designed to support the creation of multiple sidechains, capable of differentiating and fragmenting the huge weight of transactions on the primary layer.

Among other things, the miner is already working on 2 sidechains in particular, Coordinate e Alysconceived respectively to offer fertile ground for the proliferation of Ordinals and to allow compatibility with Ethereum and with institutional asset tokenization operations.

In fact, this layer-2 was designed mainly to facilitate the work of developers and explore new connections with web3, before improving the end user experience.

As written in the blog, Anduro is programmed to:

“systematically integrate decentralized governance, with the goal of becoming the most trustworthy and developer-oriented layer-2 of Bitcoin”

It should be underlined that Anduro presents an innovative system called “merge-mining”, which allows Marathon to simultaneously earn from both Bitcoin mining and transaction fees from the new blockchain, all with protection against MEV attacks.

At the center of the project is the “Anduro Collective”, i.e. a sort of heterogeneous consortium composed of entities particularly devoted to Bitcoin, which will manage the governance of the chain

in the first phase of life and will gradually be abandoned with other decision-making alternatives not based on trust.

Source: Litepaper Anduro

As highlighted by Fred Thiel, president and CEO of Marathon, the Bitcoin ecosystem needs a shake-up from a blockchain architectural point of view, capable of supporting a new wave of innovation:

“We believe in experimentation, iteration and letting the market decide which ideas are successful. Anduro is one of those ideas that provides value to Bitcoin holders and application developers, while strengthening the long-term sustainability of Bitcoin’s Proof-of-Work.”

Layer-2 is not live yet; at this stage Marathon is focusing on finding “influential and aligned” commercial partners capable of investing in the mainstream adoption of Bitcoin.

Marathon’s financial performance and MARA stock analysis

On the same day as the announcement of Bitcoin Anduro’s layer-2, iThe miner Marathon Digital celebrated the release of its fourth quarter financial results by recording strong growth compared to the previous year.

In particular, the cryptocurrency miner reported a net profit of $261.2 million ($1.06 per diluted share) which stands out from the net loss of $994 million ($6.12 per diluted share) reported in the final quarter of 2022.

I revenues rose 229% to $387.5 million in 2023 from a base of $117.8 million in 2022.

Obviously the excellent performance derives from the healthiness of the Bitcoin blockchain, where the company bases its core business: block production in 2023 for Marathon was 210% higher than last yearthus managing to extract more coins which at the same time boast an increased value of 101% on average.

In fact, Marathon’s revenues listed above derive mainly from the sale of Bitcoins extracted from the network, having liquidated approximately 74% of what was produced in the calendar year.

The miner’s solid financial position is confirmed by the company’s liquidity data, which as of December 31, 2023, held $357.3 million without restrictions and cash equivalents on its balance sheet as well as a balance of 15,126 bitcoins.

Overall cash and bitcoin amount to 997.0 million dollarsready to be invested or used to strengthen your business structure.

Below is a snapshot of Marathon’s mineral production, with a year-over-year and quarter-over-quarter comparison.

For further information you can consult the press release from the company where all the financial data are reported in detail.

In such a context, made largely positive by the strong presence of Marathon in Bitcoin mining, MARA stock can celebrate a revived price action after a disastrous 2022.

In fact, following a 95% drawdown from the highs of November 2021 to the lows of January 2023, the stock listed on the Nasdaq reports a overall price growth of 650% until today.

Compared to March 1, 2023, the increase in the value of MARA shares was 300%, driven by the restart of the crypto market.

Bitcoin’s bullish price action has positively influenced the performance of the mining stock, whose fate depends on that of the digital gold that the company extracts daily.

MARA even presents increased volatility compared to its underlying Bitcoin, with very evident mood swings in the middle of the bull and bear market phases.

At the moment prices remain above the weekly 50 EMA and are fighting with the $30 threshold which separates the stock from another upward leg up.

Although we could expect a small correction for the stock now, especially if Bitcoin does not perform positively, the road between now and the next few months for MARA is marked upwards.

Indicatively, we expect it to reach at least 50 dollars, even more so if Marathon manages to be successful among the Bitcoin community with the launch of the layer-2 Anduro.