727 FinanceAfter PEARL public chain gained popularity with its PoUW narrative, its coin price surged and then fell back, retracing more than 35% in ten days. Due to the time lag in coin price and network difficulty adjustments, miners' per-card revenue shrank, and total network hashrate subsequently declined, making it easy for late-entry miners to incur losses. The miner community has diverged: home miners with sunk hardware costs bear only electricity expenses and can still be profitable; large-scale mining farms weigh the opportunity cost between mining and AI leasing, with some shifting to AI business; cloud computing short-term rental miners are the first to exit due to high rental costs, while long-term rental miners choose to hold on. The public chain also has multiple hidden risks: more than 90% of hashrate is not conducting real AI computation but idling; daily token output creates selling pressure in the secondary market, and early unlocked chips also harbor risks; a single mining pool'
Author: Jae, PANews
Not long ago, the public blockchain Pearl rapidly rose to prominence on the narrative of PoUW (Proof of Useful Work) and high mining returns, but it has now suffered a market reversal.
Ten days ago, after the PEARL token hit an all-time high of $2.43, a massive influx of GPU hashpower rushed in. However, the market quickly reversed, and in just ten days the token price retraced more than 35%, falling to around $1.5. Shortly thereafter, network hashpower also fell from its all-time peak of 87.79 EH/s to as low as 66.34 EH/s.
As network hashpower continued to climb and mining difficulty kept rising, per-card returns shrank sharply, and more and more miners began to complain that mining was no longer profitable. Especially for miners renting GPUs, the high cost of hashpower rental is eating into profits, and some late entrants have even fallen into losses.
This round of dramatic hashpower swings is like a mirror, reflecting the starkly different survival realities of different miner groups: some have shutdown prices far below the token price and are earning steadily with no loss; others are already standing on the cliff edge of break-even, ready to pull out and leave at any moment.
Hashpower Chases Token Price, Difficulty Lags Behind: Late Entrants Become the "Bagholders"
In all PoW-type networks, price is always the baton that directs hashpower, but there is a time lag before the baton's signal reaches the hashpower side.
On October 21, the daily gross revenue per RTX 4090 card reached $11.4, far higher than other GPU mining coins over the same period. The rich returns drove large amounts of idle hashpower to migrate across networks. Network hashpower climbed all the way from about 70 EH/s, reaching a peak of 100.92 EH/s on October 27. As of now, network hashpower has fallen back to 85.52 EH/s.
The consequence of hashpower migration is that the block production rhythm was disrupted. Pearl's target block time was originally 194 seconds; during the most feverish phase of hashpower, actual block time was compressed to 160 seconds, passively producing nearly 40 extra blocks per day and creating more than a million new PEARL out of thin air each day that were dumped onto the secondary market.
The most fundamental contradiction is that network difficulty adjustment always lags one step behind the speed of hashpower influx. It was not until October 28 that network difficulty climbed to a high above 49M, up nearly 20% cumulatively from the day of the token price peak, and it continued to hover at high levels. By then, the PEARL price had already fallen to $1.75.
The scissors gap of token price moving down and difficulty moving up directly squeezed miner returns, with average daily gross revenue per card falling more than 30% from the peak. High-cost hashpower was the first to flee, and network hashpower shrank by nearly a quarter within two days, only then did block time return to the baseline range designed by the protocol.
In this mismatched race, the miners who rushed in first captured the most dividends, while the latecomers who caught on late became the "bagholders" of the market reversal.
Same Card, Different Accounts: Retail Miners Count Cash, Mining Farms Switch to AI, Short-Term Renters Flee
The same card, in different hands, is a different business. Pearl's miner camp has already split into three clearly distinct groups.
Taking RTX 4090, the main network graphics card, as an example, under the network difficulty and hashpower environment of October 30, a single card could produce about 4.2 PEARL per day. Among them, different miners have vastly different capital costs and shutdown prices, which also determines their completely different decision-making logic in the face of this retracement.
Home Miners: Sunk Costs Provide a Safety Buffer
For most home miners, the graphics card was originally used for gaming or work, and the hardware purchase cost is already sunk; mining only requires bearing the additional electricity cost.
At an average residential electricity price of $0.16/kWh, the daily electricity cost per card is only $3.84, corresponding to an average shutdown price as low as $0.87. In other words, as long as the average PEARL price remains above $0.87, they are earning pure profit.
Even though the token price has already fallen more than 35%, their daily net profit per card is still stable at around $2.67, with a profit margin of about 70%.
For home miners, this retracement is not even a winter, at most "a bit more wind." As long as cash flow remains positive, they will keep their machines running, unless the token price continues to halve or a replacement coin with higher returns appears.
Large-Scale Mining Farms: Calculating Not Just Electricity, but Also Opportunity Cost
Mining farms with industrial-grade power are the cost depression of the mining industry. PPA contract electricity prices are as low as $0.05/kWh, and after adding all allocated costs such as site and operations and maintenance, the all-in daily cost per card is only $0.48, corresponding to an average shutdown price of only about $0.11. Judging mining alone, their safety cushion is even thicker than that of home miners.
But mining farms have another way of calculating the accounts.
Hashpower is a general-purpose asset. The cuPOW algorithm is compatible with AI inference tasks, so hardware can switch at any time between mining and renting out AI compute. Currently, the net cash flow from providing AI inference rental services with an RTX 4090 is about $0.35/hour, equivalent to about $8.4 per day.
On October 30, the daily per-card revenue from PEARL mining slid to $6.51, already lower than the return from AI inference rental.
Rather than continue mining while taking on the risk of a declining token price, it is better to collect hashpower rent steadily. As a result, some mining farms with lower risk appetite began to withdraw proactively, shifting their hardware to AI rental business or other PoW networks with more competitive returns, becoming one of the drivers of hashpower peaking and falling back.
For mining farms, opportunity cost and GPU return per unit time are likewise two important financial metrics.
Cloud Hashpower Renters: The Main Force Behind This Round of Violent Hashpower Fluctuations
In this round of hashpower clearing, short-term hashpower renters are the most resolute fugitives.
They do not hold any physical hardware; they only rent hashpower by the hour on platforms such as Vast.ai, "mine, withdraw, and sell" the same day, and earn the intraday spread. At an average rental price of $0.35/hour, the average daily cost is as high as $8.4, corresponding to an average shutdown price of about $2.
When the token price plunged to $1.75, renters had already collectively fallen into losses. Cloud hashpower has no sunk costs, and the shutdown decision is made in an instant.
During the three days of the sharp hashpower decline, the vast majority were short-term rental "speculators" exiting on a large scale.
However, some cloud hashpower miners have signed weekly or monthly non-refundable long-term contracts. The rent has already been paid, and as long as they continue mining, they can recover part of the loss. If the PEARL price rebounds, they may still have a chance to break even. Therefore, some long-term rental miners are still holding on.
Ninety Percent of Hashpower Spins Idle, Liquidity and Centralization Risks Loom
In addition to the internal trouble of hashpower retreat, Pearl also faces the external trouble of its narrative being questioned. Pearl paints the story that "mining = doing useful AI computation," but between reality and the ideal there is still a huge gap.
90% of PoUW Hashpower Is Spinning Idle
PEARL's main selling point is "replacing useless hashing with AI computation, making mining generate commercial value." But in reality, this vision currently remains only on paper.
Scholar Abhinaba Basu's empirical study, after sampling and analyzing 8,012 active mining machines, pointed out that more than 90% of the network's hashpower is not running any deep learning models or real inference tasks, but is merely continuously computing meaningless random matrices.
The reason is that connecting to real AI inference requires handling context scheduling, model weight loading, and network I/O overhead, which would cause the effective hashpower of mining machines to drop by 10%-30%. Under the rule that block rewards depend only on hash difficulty, the optimal choice for rational miners is to abandon real demand and purely spin idle running random matrices. So-called "useful work" is to a large extent "garbage mining" operations.
Potential Selling Pressure in the Secondary Market
The continuous release of tokens also brings considerable selling pressure to the secondary market.
Pearl currently produces about 1 million tokens per day. At market prices, daily new miner selling pressure exceeds $1.55 million, and the annualized inflation scale exceeds $565 million, already close to the protocol's circulating market capitalization.
Meanwhile, spot trading is concentrated on a few small and medium-sized exchanges, with average daily spot trading volume of less than $10 million. Daily miner selling pressure alone accounts for nearly 20% of turnover, and depth is limited. Once concentrated selling occurs, thin bid depth can easily trigger a liquidity stampede.
In addition, during the low-difficulty period in the first 6 days before mainnet launch, nearly 122 million tokens were mined intensively across the network, accounting for more than 35% of the circulating supply. This portion of early chips lacks lock-up restrictions and has always been a dammed lake hanging over the secondary market.
Centralization Risks in Mining Pool Hashpower
Pearl's hashpower distribution also exposes potential network security risks. On-chain data shows that a single mining pool, Kryptex, has long occupied nearly half of the network's hashpower, already approaching the security red line of a 51% attack. For PoW-type systems that rely on hashpower competition to maintain network security, a single mining pool holding too high a proportion of hashpower means the network is more susceptible to risks such as hashpower concentration, transaction censorship, and potential attacks.Today, Pearl stands at a critical crossroads: after the mining dividend fades and narrative hype cools, whether it can attract enough genuine AI inference demand to turn "useful work" into commercial value will be the key determinant of its long-term prospects.
For miners or investors, this cycle of computing power's rise and fall also offers a practical lesson. More important than chasing short-term gains is recognizing which cost curve you are on. In the crypto industry, market conditions determine the ceiling of returns, while costs determine whether an individual can survive the cycle.