Marathon Digital Holdings and Zero Two to Operate Bitcoin Mining Facilities in Abu Dhabi

Marathon Digital Holdings Inc, a leader in supporting and securing the Bitcoin ecosystem, and Zero Two, an emerging blockchain and digital assets infrastructure development company focused on accelerating the global digital economy while supporting the power grid of Abu Dhabi, have announced formation of a joint venture (JV) to establish the first large-scale immersion Bitcoin mining operations in the Middle East.

The newly formed Abu Dhabi Global Markets JV Entity – ADGM Entity – will initially develop and operate two digital asset mining sites with a combined capacity of 250 megawatts. The larger 200MW site will be in the sustainability hub of Abu Dhabi, Masdar City, and the 50MW site will be in the port zone of Mina Zayed.

To power the sites, Marathon and Zero Two intend to leverage excess energy in Abu Dhabi, increasing the base load and sustainability of the Abu Dhabi grid. Marathon and Zero Two will offset any non-sustainably produced electricity with clean energy certificates.

The equity ownership in the ADGM Entity will be 80% for Zero Two and 20% for Marathon.

During the 2023 development period, capital contributions, in proportion to the equity interest in the ADGM entity, are anticipated to be $406 million. These contributions will consist of both cash and in-kind (i.e., equipment, infrastructure etc.) amounts.

The digital assets mined (bitcoin) by the ADGM Entity will be distributed twice per month and in accordance with the equity ownership between Zero Two and Marathon, respectively.

Previously, the two companies launched a pilot program to test the efficacy of building a large-scale digital asset mining operation in Abu Dhabi, where the desert climate has historically rendered air-cooled digital asset mining infeasible.

To overcome these environmental challenges, Marathon and Zero Two developed a custom-built immersion solution to cool the ASIC miners and implemented proprietary software to optimize their performance.

Feasible Project

The initial results of the pilot project, which include a significant reduction in the amount of maintenance required for the ASIC miners to effectively produce hash rate, indicate that operating immersion digital asset mining sites in Abu Dhabi is now feasible with the implementation of Marathon’s and Zero Two’s technological advancements.

The mining equipment and infrastructure required to build each site has already been ordered, and construction of both digital asset mining sites is currently underway. Once operational, these sites are expected to be among the most technologically advanced and energy-efficient digital asset mining operations globally. Based on the current construction schedules, both sites are expected to come online before the end of 2023, with a combined hash rate of approximately 7 EH/s.

Significant Milestone

Ahmed Al Hameli, Chief Executive Officer of Zero Two, said that their strategic alliance with Marathon marked a significant milestone for the blockchain and digital assets industry in Abu Dhabi.

According to him, this alliance leverages Zero Two’s regional expertise, expansive relationships, and growing blockchain infrastructure development and operational capabilities, with Marathon’s technical prowess in developing digital asset sites and innovative mining technologies.

“These synergies create a powerful combination and lay the groundwork for the success of this pioneering project in the Middle East. Marathon shares our commitment to actively supporting Abu Dhabi’s power grid and developing global digital assets infrastructure. We look forward to working with them on this venture,” he added.

Fred Thiel, Marathon’s chairman and CEO, said that the collaboration is a pivotal moment for Marathon and one that is consistent with our ethos of operating at the forefront of the technology curve and developing innovative technology solutions to advance the Bitcoin mining industry.

For this project, Marathon’s team successfully co-developed and implemented a full immersion solution, as well as developed proprietary mining software from the ground up to provide flexibility, resilience, and optimization.

“In Zero Two, we have found a valuable collaborator whose expertise in digital asset infrastructure development, and whose relationships in the region are an optimal complement to our team’s unique ability to build and implement innovative technologies. We look forward to working together to build the next-generation Bitcoin mining facilities in Abu Dhabi,” Thiel added.