Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 35

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 35
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 to the blockchain. These rewards are received by the Company
directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake 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 June 30, 2025 and December 31, 2024, the
Company had native staked 21,568 ETH and 21,568 ETH, respectively, on the Ethereum blockchain. For the six months ended June 30, 2025
and 2024, the Company earned 377.8 ETH valued at $925,973 and 220.5 ETH valued at $695,055, 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.

For the six months ended June 30, 2024, the Company
generated revenues of $4,503 from the liquid staking. We generated no revenue from liquid staking during