Won't Evolution push MN rewards from today's 8.33% to almost zero due to massive increase in MNs?

[RGXDK]

Current masternode rewards are 8.32%. With "savings accounts" in Evolution, everyone will be able to put their Dash to be used by other people to create masternodes.

1. Won't this result in a massive increase in the number of MN, pushing the rewards to a much lower value than it is today? I'm thinking less than 1%.

2. How exactly will the network decide who will get to create those MN? Say 5 people put up 200 mn in their savings account so they have 1k Dash together and 100 people are interested in setting up a masternode, how is this going to play out?

3. A 6-8% ROI makes Dash attractive, however a 1% might negate that due to it's emission rate.

If anyone has more info I would love to read more about it. Opinions and general comments are also much welcomed. Please let me know if I've made a mistake on my assumptions too.

Thank you.

 

[jimbursch]

More MNs provide more service to the network -- more nodes, more bandwidth, more storage, more security -- which is good for the network, especially since Evo will demand additional services. This is a good thing.

Yes, more MNs means less yield on collateral, so there will be an equilibrium -- a point at which it is not profitable to add another MN to the network. This would also be a point at which adding another MN is just wasteful because the network is adequately serviced.

 

[RGXDK]

More MNs provide more service to the network -- more nodes, more bandwidth, more storage, more security -- which is good for the network, especially since Evo will demand additional services. This is a good thing.

Yes, more MNs means less yield on collateral, so there will be an equilibrium -- a point at which it is not profitable to add another MN to the network. This would also be a point at which adding another MN is just wasteful because the network is adequately serviced.

Thanks for your reply. What is your evidence to support this equilibrium?

 

[Instacoins]

The point would be reach as soon as hosting costs overtake the MN return. As soon as that happens MNs might get moved to china (just like we saw it in bitcoin mining. First you could do it from everywhere and it made money; like MNs currently. At some point it might Change). I dont see there anything bad. Its unpreventable.

 

[TroyDASH]

What is your basis for getting that number -1-2%?

If the number of masternodes doubles, then the percentage reward halves. Right now there aren't even enough coins to create 8000 Masternodes if every coin was used towards collateral, so it would be 4% minimum. Of course this will decrease over time as the block reward goes down.

 

[RGXDK]

What is your basis for getting that number -1-2%?
If the number of masternodes doubles, then the percentage reward halves. Right now there aren't even enough coins to create 8000 Masternodes if every coin was used towards collateral, so it would be 4% minimum. Of course this will decrease over time as the block reward goes down.

It's in my message: "With "savings accounts" in Evolution, everyone will be able to put their Dash to be used by other people to create masternodes. ". When millions of people can just put their little Dash into basically masternode shares with a click of a button, the number of masternodes is not going to double, it's going to 10x-50x.

 

[RGXDK]

The point would be reach as soon as hosting costs overtake the MN return. As soon as that happens MNs might get moved to china (just like we saw it in bitcoin mining. First you could do it from everywhere and it made money; like MNs currently. At some point it might Change). I dont see there anything bad. Its unpreventable.

Amanda ( @amanda_b_johnson, big fan of your work Amanda! ) is going around promoting "masternodes are earning $1000/mo, passively. Better than most rental properties.". That won't be true when evolution comes along. She does mention "as of today", but since Evolution is just a few months away...

 

[TroyDASH]

It's in my message: "With "savings accounts" in Evolution, everyone will be able to put their Dash to be used by other people to create masternodes. ". When millions of people can just put their little Dash into basically masternode shares with a click of a button, the number of masternodes is not going to double, it's going to 10x-50x.

There cant be more Masternodes than the total coin supply divided by 1000, even if a billion people put in their life savings.

 

[RGXDK]

There cant be more Masternodes than the total coin supply divided by 1000, even if a billion people put in their life savings.

Good point! Supply ~= 8mn / 1000 = 8000 masternodes max. If the network can have a maximum of 8,000 masternodes, then what will happen if I put my dash into the Savings account at evolution and no more masternodes can be created?

Also if there is a cap on the number of masternodes, then we could calculate the minimum reward a masternode will receive
today 4k masternodes -> 8%,
8k masternodes -> 4%,
16k masternodes -> 2%
18k masternodes (maximum coin supply) ~1-2%

Does my logic makes sense?

 

[acidburn]

But surely the more nodes = higher costs to invest?

If higher cost then the 1% reward doesn't matter? That 1 payout a month might be worth £2,000?

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[RGXDK]

But surely the more nodes = higher costs to invest?

If higher cost then the 1% reward doesn't matter? That 1 payout a month might be worth £2,000?

Sent from my iPhone using Tapatalk

The absolute value of the payout doesn't matter, what matters is the ROI (%). It applies to masternodes, mining, dividends, businesses etc.

 

[TroyDASH]

Good point! Supply ~= 8mn / 1000 = 8000 masternodes max. If the network can have a maximum of 8,000 masternodes, then what will happen if I put my dash into the Savings account at evolution and no more masternodes can be created?

Also if there is a cap on the number of masternodes, then we could calculate the minimum reward a masternode will receive
today 4k masternodes -> 8%,
8k masternodes -> 4%,
16k masternodes -> 2%
18k masternodes (maximum coin supply) ~1-2%

Does my logic makes sense?

The "shares" would always be contributing towards a masternode collateral, its just a question of how much of the collateral or how much of the total combined collateral it is.

Yes I agree with that model -- when the MNs doubles then the reward, as a percentage, halves.

I don't know as to your other question of the "how" or the "who" with respect to the Masternodes that are created from savings account shares.

Over the long term, you are right that the percentage rewards cannot continue to stay relatively high as long as the coin supply has a maximum. At that point I think we have to think about ROI in a different way, because unlike fiat, a coin with a max supply is deflationary, not inflationary.

 

[acidburn]

But my point still stands. The value paid out in fiat will go ip


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[camosoul]

I see a lot of assumptions being made in this thread.

Evolution in a few months? I'm questioning if it will happen at all. And even if it does, will it be so far behind everyone else that it doesn't matter? There has been about 2 years of jacking off and doing not one damned thing, priorities are completely head up ass...

Coin supply reduced to basically zero, but price won't go up? Really? Is this how the market works?

The concept of masternodes is going to disappear and we'll have nothing but these "savings accounts?" Or we somehow have both? Are we forgetting that there is going to be manual, human arbitration added? Could not these things be independent concepts? Has the means for this function ever been mentioned? Where are you getting this information? Consider the extreme left-fringe kill all business neo-Bolshevik attitude of 98% of those involved with DASH... Once this arbitration model gets implemented and every arbiter sides against the vendors with zero consideration of facts or reality... "ask for arbitration, get free stuff." It's going to be worse than the chargeback system. Wasn't the whole point of crypto that the transactions aren't reversible?

Not to mention, other forms of investment. This isn't operating in a vacuum. If the APY becomes low enough or the difficulty of implementation high enough, there will be better places to put the money for better yield. Much lower than 7% and it isn't worth my time. If I have to share 50/50 with do-nothing "savings accounts," I'm out. So will be everyone else with the capacity to do basic math. If I can't walk away with at least 7%, I can easily find alternatives where I can. Since MNs hit the $100k mark, growth in MN count has been pretty small... For a halving of payout, I'd predict a little more than an order of magnitude increase in fiat value. But, would it ever get that far?

All levels of DASH, from leadership to fanboys, seem to think everything else in the world has disappeared and DASH is the only game in town for everything forever. Massive ego tripping, yes-man worship, perspectives distorted into bizarre delusions... Do you really think DASH will get that far? It's already falling apart...

 

[TroyDASH]

If I have to share 50/50 with do-nothing "savings accounts," I'm out.

You would share if it was the difference between having 1 masternode, versus having 2 Masternodes and sharing 50/50 on the second one.

 

[Instacoins]

I dont think its falling apart at all. Its a great concept. And if you have better ideas feel free to fork.

 

[RGXDK]

The "shares" would always be contributing towards a masternode collateral, its just a question of how much of the collateral or how much of the total combined collateral it is.

Yes I agree with that model -- when the MNs doubles then the reward, as a percentage, halves.

I don't know as to your other question of the "how" or the "who" with respect to the Masternodes that are created from savings account shares.

Over the long term, you are right that the percentage rewards cannot continue to stay relatively high as long as the coin supply has a maximum. At that point I think we have to think about ROI in a different way, because unlike fiat, a coin with a max supply is deflationary, not inflationary.

I found this post on Dash's inflation rate.
https://bitco.in/forum/threads/inflation-rate-of-major-cryptocurrencies.1077

Does the minimum MN ROI make sense?

 

[TroyDASH]

I found this post on Dash's inflation rate.
https://bitco.in/forum/threads/inflation-rate-of-major-cryptocurrencies.1077

Does the minimum MN ROI make sense?

View attachment 4163

Yes. But that is assuming that every coin is going to be part of a masternode share. The number of actual Masternodes is going to be lower than the max total that could potentially exist, so the effective rates will be higher. Secondly, measuring ROI denominated in dash is different than measuring ROI denominated in fiat, because fiat is inflationary with no maximum supply.

 

[RGXDK]

I see a lot of assumptions being made in this thread.

Evolution in a few months? I'm questioning if it will happen at all. And even if it does, will it be so far behind everyone else that it doesn't matter? There has been about 2 years of jacking off and doing not one damned thing, priorities are completely head up ass...

Coin supply reduced to basically zero, but price won't go up? Really? Is this how the market works?

The concept of masternodes is going to disappear and we'll have nothing but these "savings accounts?" Or we somehow have both? Are we forgetting that there is going to be manual, human arbitration added? Could not these things be independent concepts? Has the means for this function ever been mentioned? Where are you getting this information?

Not to mention, other forms of investment. This isn't operating in a vacuum. If the APY becomes low enough or the difficulty of implementation high enough, there will be better places to put the money for better yield. Much lower than 7% and it isn't worth my time. If I have to share 50/50 with do-nothing "savings accounts," I'm out. So will be everyone else with the capacity to do basic math. If I can't walk away with at least 7%, I can easily find alternatives where I can.

All levels of DASH, from leadership to fanboys, seem to think everything else in the world has disappeared and DASH is the only game in town for everything forever. Massive ego tripping, yes-man worship, perspectives distorted into bizarre delusions... Do you really think DASH will get that far? It's already falling apart...

I agree that Masternode owners should receive substantially more than "do nothing savings account". That's one of the reasons why I left Pivx. You get 4.53 pivx/day for for running a masternode and 4.42pivx/day for just "staking" the same number of coins in your wallet. Does anyone have more info on that?

Why exactly is dash falling apart in your opinion?

 

[RGXDK]

when moocowmoo made this spreadsheet back in 2015 I don't think Evolution was on the line so these ROI will be way lower when everyone start putting their dash into a savings account.

https://www.dash.org/forum/threads/simple-masternode-reward-calculator-openoffice-spreadsheet.3030/