Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 43

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 43
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 to the total ETH staked by all validators.

The
provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation
or validation under a smart contract with a network represents a performance obligation. The transaction consideration the Company receives,
the digital asset awards, is a non-cash consideration, which the Company measures at fair value on the date received. The fair value
of the ETH reward received is determined using the quoted price of the ETH at the time of receipt. The satisfaction of the performance
obligation for transaction verification services occurs at a point in time when confirmation is received from the network indicating
that the validation is complete, and the awards are deposited to our address. At that point, revenue is recognized.

As
of September 30, 2025 and December 31, 2024, the Company had native staked 99,936 ETH and 21,568 ETH, respectively, on the Ethereum blockchain.
For the three months ended September 30, 2025 and 2024, the Company earned 644.3 ETH valued at $2,649,831 and 161.9 ETH valued
at $447,004, respectively, from such staking activities and recognized the ETH staking rewards as revenues. For the nine months ended
September 30, 2025 and 2024, the Company earned 1022.1 ETH valued at $3,575,804 and 382.4 ETH valued at $1,142,059 respectively,
from such staking activities and recognized the ETH staking rewards as revenues.

(b) Liquid
staking

Liquid
staking is similar to native staking in terms of performance obligations, determination of transaction price and revenue recognition. When
we participated in liquid staking via Portara protocol, the Company received receipt tokens sETH-H to represent the staked ETH at 1:1
ratio. The liquid staking rewards were in the form of rETH-H which could be redeemed for ETH from the liquid staking provider or exchange
for ETH via over-the-counter markets. When we participated in liquid staking via Liquid Collective protocol, the Company received
receipt tokens Liquid Staked ETH (“LsETH”) to represent the staked ETH. LsETH uses a floating conversion rate, or protocol
conversion rate, between the receipt token and staked tokens, reflecting the value of accrued network rewards, penalties, and fees associated
with the staked tokens.