Alongside its recent block size increase, the digital currency Dash and its Masternode system reveal the protocol is doing more than just governance features. According to a recent study, a Masternode holds similar value to a bond and has given those who operate a node a substantial annual return of investment.
Dash Masternode Study Shows an Annual 18% ROI
The cryptocurrency Dash created by Evan Duffield was launched as Darkcoin on January 18, 2014. Since then the token with privacy-centric features and an x-11 algorithm has gained steam and has rebranded to Dash in 2015. Over the course of the currency’s life, it has seen quite a bit of development with features like Darksend, InstantX, and its Masternode network.
The implementation of the Masternode system has gained significant traction and media attention since it was first introduced. A full explanation of these types of nodes can be found here, and the site claims operators can earn $61 USD per month. Recently, a study has revealed that over a 16 month period, a Dash Masternode generates an 18% annual return giving the cryptocurrency’s leading supporters a continuous flow of income in Dash.
Not only does the Dash network provide miners with a Proof-of-Work (PoW) reward system, users can also obtain a reward for operating a Masternode. The Dash team refers to this system as a two-tier network that performs various other features like governance.
The primary function of the Masternode network is to ensure the anonymization of Darksend as well as provide a faster on-ramp to instant transactions. For completing these tasks, Masternode holders are given a partition of each mined block and also a level of voting power for the future development of the Dash environment and code. The reward study was done by Robert La Quey, Ph.D., using a python program that helped him assess the data. La Quey states in his review:
Data was gathered in a spreadsheet from a Masternode operated by Dash’s core developer ‘Crowning’ from Dec. 14, 2014, until Mar. 14, 2016. The data was exported to a file in .csv format from which it was imported into a Python program for detailed analysis and display.
Dr. La Quey is a physicist studying at the University of California in San Diego developing specialized tools for NASA. The doctor also has conducted analytical studies for Cal Tech’s Jet Propulsion Lab and founded an organization called the Maya Corporation.
The 16-month study of Dash Masternodes gave an inside look at the system and the growth of the servers. Dr. La Quey reports that Masternodes increased by 200% while performing the study from 1,637 to 3,688 active nodes. After several protocol changes and upgrades, a Masternode operator’s return on investment (RoI) showed extraordinary rises. Dashpay Magazine reported the study’s findings:
During this period, Crowning’s Masternode earned 240 DASH on the 1,000 DASH underlying collateral. This is 180 DASH ((12/16)*240 =) or an 18 percent annual return.
The Dash community is thrilled with this level of RoI and the level of success the protocol has shown with governance implementations. According to coinmarketcap.com, the cryptocurrency has a capitalization of over $51 million USD at $7-8 dollars per DASH.
This means miners and Masternode operators are pulling in quite a bit of income with every block found. The community believes the Masternode network is creating a “bond-like” financial management tool offering significant interest on their principal investment.
Would you host a Dash Masternode considering the potential ROI? Let us know in the comments below!
Images via Dash associated websites, Bitcointalk.org