Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1573

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 4
Chunk 1573
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 Company has entered into network-based smart
contracts by staking ETH on nodes run by third-party operators or nodes maintained by us in 2022. Through these contracts, the Company
stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able
to withdraw the staked ETH which was previously locked-up in staking contracts since the Shanghai upgrade was successfully completed on
April 12, 2023. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to the block
rewards and transaction fees for successfully validating or adding a block 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 December 31, 2024 and 2023, the Company
had native staked 21,568 ETH and 12,352 ETH, respectively, on the Ethereum blockchain. For the years ended December 31, 2024 and 2023,
the Company earned 565.1 ETH valued at $1,815,373 and 287.0 ETH valued at $531,702, 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 OTC.