Wu Jihan personally tells the story of the outcome of the big split. What will happen to both parties in the future? (Full text in Chinese and English attached)

Wu said author | Colin Wu

Editor of this issue | Wu Talks about Blockchain

Wu Blockchain learned that at 10:05 pm on January 26, Wu Jihan posted a tweet again after 8 months, with the content being the hash of the reconciliation between the two founders of Bitmain, ending his "2,815 days" of work at Bitmain.

The core content is as follows:

1. Zhan Ketuan borrowed 400 million US dollars from Bitmain and raised 200 million US dollars from outside to acquire about half of the shares of Wu Jihan's team. Bitmain still has 327 million US dollars in cash.

2. Wu Jihan will take away Bitdeer and overseas mining farms and will serve as the chairman of Bitdeer.

3. The former risk control director and financial director of Wu Jihan’s team remained on the Bitmain board of directors until the listing.

4. On January 26, the legal persons of all Bitmain’s subsidiaries began to change.

The content is not much different from the launch of the Bitmain Split: Zhan Ketuan returns, Wu Jihan exits with cash from Pool B and Xiaolu (Bitmain Series 26).

Several subsequent impacts and future interpretations of this spin-off are as follows:

1. Bitmain has sold out most of its Bitcoin chip production capacity, and it is expected to start selling the 2022 production capacity. The quality and yield of 5nm chips are a question mark.

2. Bitmain will start producing mining machines for Ethereum, Litecoin, DASH, BTM and other small currencies that it has previously produced. However, it is not easy to obtain chip production capacity.

3. Bitmain is rumored to be recruiting a new CFO to prepare for its IPO. According to investors’ requirements, it needs to be listed with a valuation of no less than US$5 billion by the end of 2022. This valuation is not easy to achieve and depends on the price of Bitcoin.

5. As for Wu Jihan, Siliconbase has appointed a new CEO with a total of more than 200 people. The company will focus on cloud computing power (formerly Xiaolu), mining pools (formerly BTC.com), overseas mining farms, mining machine trading platforms, mining machine maintenance, etc. The ultimate goal is to go public in the United States.

6. Wu Jihan owns the financial business Matrixport, the mining business BitDeer (Silicon Valley Aviation), and cryptocurrencies worth hundreds of millions. It is possible that he will set up a VC for investment in the future.

7. Wu Jihan still holds some shares in Bitmain and will appoint two directors to Bitmain to be in charge of finance and audit (most likely at the request of investors) until Bitmain is successfully listed. This may help maintain the normal operation of the company before its listing.

To be fair, both sides face considerable difficulties. Can Bitmain improve its management, learn from the failures of 2018-2019, and successfully go public? As for Silicon Base, without the support of Bitmain and Antminer, cloud computing power and mining pools are in a crowded field. Whether they can achieve independent hematopoiesis and eventually go public successfully requires further observation.

The full text of the settlement agreement is as follows:

“Regarding the settlement between the two co-founders of Bitmain

The differences between Micree (Zhan Ketuan), the two co-founders of Bitmain, and I have finally been resolved in an amicable and, more importantly, constructive manner. As of today, I have resigned from my position as CEO and Chairman of Bitmain.

Micree purchased almost half of Bitmain’s shares owned by Bitsource, a ticker symbol representing a group of founding shareholders including me, for $600 million. To complete the stock purchase, Micree obtained a $400 million loan from Bitmain, while he pledged to raise $200 million from outside the group.

As of yesterday, Bitmain had $327 million in legal cash, which is twice the cash required by preferred shareholders to reach this settlement agreement. The short-term liquidity gap is negative $92 million, and the company is well-solved. On the other hand, Bitmain has the best mining machines sold on the market. Therefore, Bitmain's financial situation is good and healthy, so the loan to Micree will not have any negative impact on the sustainability of Bitmain's operations.

Also, under this settlement, Bitdeer is being spun off from Bitmain today along with mining farms in the US and Norway. I will serve as the Chairman of Bitdeer. Matt Kong will serve as the CEO of Bitdeer. Antpool will soon be spun off into an independent company led by Micree.

Through the above arrangement, Bitmain’s business model will be highly simplified, which will make the IPO much easier and investors more likely to profit from their investment.

From now until Bitmain goes public, the Bitmain board will consist of 5 seats. Micree has the right to nominate three seats, and I will nominate the other two seats. In order to better serve the interests of Bitmain, I have invited two colleagues who are more capable than me to perform the duties. They are Zhu Xiang and Liu Jianchun. Zhu Xiang is one of the founding team of Bitmain, and he led the hardware design of S1 and S19, which are one of Bitmain's best-selling mining machine products. Liu Jianchun has served as our Chief Financial Officer and Chief Financial Officer for 5 years. These two board members will serve the interests of the company as a whole, not the interests of any specific shareholders. According to the corporate governance arrangement, we have assigned risk control and internal audit responsibilities to Zhu Xiang and Liu Jianchun.

As part of the leadership transition, all subsidiaries that remain part of the Bitmain Group have begun making changes to their board members or legal representatives today.

With the settlement agreement concluded today, Bitmain has opened a new page, bringing great opportunities. As a co-founder of Bitmain, I have enjoyed a lot of work in my 2,815-day journey, with the strong support of many customers, colleagues, friends and investors, and I extend my sincerest wishes to Bitmain and its leader Micree.

Wu Jihan

Original English:

Regarding the settlement between Bitmain's two co-founders

The disagreement between Micree and myself, the two co-founders of Bitmain, has been finally settled in an amicable and, more importantly, a constructive manner. I have resigned from the CEO and Chairman of Bitmain as of today.

Micree purchased almost half of the Bitmain shares owned by Bitsource, which is a code name represents a group of founding shareholders including myself, for US $600m. In order to complete the share purchase, Micree obtained a loan of US $400m from Bitmain while he committed to raise another US $200m from outside of the group.

As of yesterday, Bitmain has US $327m in fiat cash, which was twice higher than what is required by the preferred shareholders in order to close this settlement. The short term liquidity gap is negative US $92m. .

Also pursuant to the settlment, Bitdeer is spun off from Bitmain today together with the mining farm operations in the US and Norway. I will be the chairman of Bitdeer. Matt Kong will be the CEO of Bitdeer. Antpool will soon be spun off into an independent company to be led by Micree.

Through the above-mentioned arrangement, Bitmain's business model will be highly streamlined which will make it much easier to go for an IPO. The B and B+ Round investors also got their number of tripled under this arrangement as compensation of valuation adjustments. It is more likely for those investors to be profitable from their investment.

--From now until the listing of Bitmain, the board of Bitmain will consist of 5 seats. Micree will have the right to nominate three seats and I will nominate the other two. To better serve the interest of Bitmain, I have invited two colleagues who are more capable than myself to perform the duty as directors. They are Xiang Zhu and Jianchun Liu. Xiang was one of Bitmain founding team, and he led the hardware design of S1 and S19, which are among the most import mining rig products of Bitmain. Jianchun has been our chief financial controller and CFO for 5 years. These two board members will serve the interest of the company as a whole but not of the interest of any specific shareholder(s). According to the corporate governance arrangements, we assigned the risk control and internal audit duties to Xiang and Jianchun.

As part of the transition of the leadership, all the subsidiaries that remain to be within the Bitmain group have begun to file the change of their board members or legal representatives today.

Upon the closing of the settlement today, Bitmain has turned over a new page with great opportunities ahead. As the co-founder of Bitmain, I enjoyed the 2,815 days of journey working for it with numerous help and support from lots of customers, colleages, friends and investors, and I give my most sincere blessing to Bitmain and its leadership of Micree.

Jihan Wu

Jan 26, 2021

(Disclaimer of Interest: As of press time, the author has no cooperative interest relationship with the subject mentioned in the article)