How You Can Make Blockchain Better While Getting Paid To Do it
In November 2020 I purchased my first $STRONG as a trader, with no idea what it was. It was around $19 at the time.
Flash forward to today, I recently spent $1.7m to acquire 2,000 Strong, and used that Strong to create 250 nodes; producing $12,500 a day in passive income.
And no, that wasn’t a typo.
That is over $4,000,000 a year in passive income, simply running Strong nodes on top of the Ethereum blockchain. And I use the word “simply” because it is exactly that.
Strong lets you create a node in two mouse clicks, and by doing so earns rewards paid in Strong as passive income.
But what is Strong?
What is a node?
Keep reading; let’s get into it.
Let’s first start out by taking a look at why Strong has been the best investment I’ve made in crypto; outperforming most tokens, even during the last two short-lived bear markets.
Strong performs in the toughest conditions:
Week of May 10th, Strong hit an all-time high of $182, while ETH hit $3,750. When ETH tanked shortly thereafter, losing more than 52% of its value over the next six weeks, Strong not only went down less (42%), but something interesting happened.
The week of May 31st Strong started climbing, while ETH dropped and would continue to do so for the next few weeks. ETH didn’t start to fully recover until the week of June 26th; while Strong had already started its climb at the end of May, going on an impressive run-up of 700% to its current all-time high of $1,000.
Strong chart by week (purple box outlines May — June)
Eth chart, same time period
And this wasn’t the first time something like this happened.
So why does Strong perform so well when the rest of the market isn’t? The answer to that lies in the utility of the token.
What does Strong do?
We first need to understand how blockchain works. There are two operators within the blockchain ecosystem that keeps the network moving and secure.
Miners, and node operators.
Miners get rewarded for processing every transaction currently happening within a block while keeping a record of every transaction that has happened before that. This is why blockchain is so secure, every server on the network has a copy of the blockchain, so if one part of the network is attacked, the rest of the network can continue to work.
This is called decentralization.
There is no one single point of failure. If you run a server, and that server is attacked, it can be taken offline, rendering it and any application or website running on it useless. Blockchain is essentially hundreds of thousands of connected servers, each containing a copy of every transaction happening at that moment, as well as the entire history of the blockchain since the beginning.
In addition to miners, node operators are the other key players within the blockchain that not only keep a record of every transaction, but they also keep the miners honest, playing a key role around decisions that are made, any time a change needs to happen to the blockchain. This is known as governance.
Additionally, nodes provide access to the blockchain by allowing people to connect their wallets as well as dApps (decentralized applications). A dApp would be a service running on top of the blockchain, like an NFT portfolio tracker
Node operators are essential for ensuring decentralization, redundancy, security, and trust. Without nodes, blockchains would not be a trustless system.
However, herein lies the problem, and why Strong is solving a big problem.
Miners get paid to process transactions, and they make good money at it too. Just speak with anyone who has ever processed a transaction on Ethereum when buying or selling an NFT. You pay a fee for that known as “gas”, and gas fees have become insanely expensive because of network congestion. I’ve personally spent $1,500 in one transaction to try and get a token at a certain price before anyone else could.
Miners make bank processing each transaction, however, node operators do not make anything.
Node operators are typically engineers who want to tinker with the blockchain or good faith actors who want to take part in the future of decentralization; in other words, hobbyists, who are taking on a critical role in the blockchain ecosystem but not getting paid for it.
If nodes are so critical to a blockchain’s success, why aren’t they incentivized?
To better understand this, let’s take a look at how Strong describes this whole ecosystem, and their solution from their medium article dated August 17th, 2020:
“Nodes are servers on a blockchain, maintaining consensus with other nodes, verifying transactions and storing a copy of the blockchain and providing redundancy and other useful services. For example on the Ethereum Mainnet, in addition to Miners there are Full nodes, Light nodes and Archiver Nodes. All three types of nodes, Full Light and Archive, are crucial to the ecosystem — yet they are not currently compensated.
With limited resources and no financial incentive, many full nodes run out-of-date software, maintain incomplete blockchain histories, and are intermittently offline. There is no easy mechanism to fix this problem once a blockchain is launched.
The more nodes running on a blockchain, the more resilient it is against catastrophe and corrupt actors.
While all nodes are beneficial, full nodes archiving the complete blockchain with 24/7 uptime provide the most value. But while full nodes are critical infrastructure to a well performing blockchain, they are expensive to operate.
Token holders rely upon full nodes to maintain high-performance decentralized networks in order for their tokens to retain value.
To encourage more high-quality node operators, there needs to be a financial incentive to turn running a node from a hobby into a for-profit activity.
Ideally the financial incentive should come from the blockchain token holders who directly benefit from a high performing node network.
Our idea is to use the mining concept to get more nodes overall, and more full nodes specifically, running on all blockchains, and to compensate them for doing so.”
Feel free to watch this video Strong just published that goes into nodes in more detail.
Market opportunity:
The team at Strong saw a market opportunity, to not only make blockchain better but to incentivize people at the same time.
They set out to build a solution that made it easy enough for anyone to quickly run and maintain a node while using the same set of best practices and getting paid to do so.
They call it NaaS, or Node-as-a-Service. Sound familiar? It’s cause everything is becoming a service. I have built multiple SaaS or Software-as-a-Service platforms over the years in web2 and can attest to just how much it has revolutionized multiple industries.
Certainly Strong is a SaaS solution, but by calling it a NaaS it speaks more directly to what they are providing.
But it's the same concept.
Make software available over the Internet as a service, so that the person licensing it does not have to set up a server and deal with power, security, software updates, and so on.
How does Strong work?
For $14.95 a month anyone (after contributing 10 Strong), can create and run a node. All it takes is filling in two fields with your node name and description, and two clicks of a mouse confirming your transaction, then bam! You are running a full node on the Ethereum blockchain, without having to worry about setting up your own servers, software, and the other things I mentioned above.
By running a node, you are paid in Strong. Each node earns 0.1 Strong per day or in blockchain time, 7,000 blocks (each block is roughly 15 seconds).
Today Strong has over 250,000 nodes running on top of Ethereum, making it the largest node operator.
Every new node takes 10 Strong to create. In crypto you do what’s called a “stake”, where you deposit those 10 Strong to create your node, however staking typically means you can get those tokens back.
In Strong’s case, once you create a node you don’t get that Strong back!
Here is how those Strong tokens are used:
The price of entry for Strong is not cheap, especially considering you don’t get this Strong back. One node would cost you around $5,000 at the current price of Strong. This is one of the key reasons why we launched Fractio.Finance which I cover in detail towards the end of this article.
Each node earns roughly 0.09 Strong per day; typically taking around 100 days to get your initial investment back.
The only other cost to run a Strong node, (besides the gas fees you need to pay every time you claim rewards), is a $14.95 per month maintenance fee per node, which is Strong’s revenue that goes towards the high cost of building out infrastructure to create more nodes.
Token Economics:
It’s important to understand the token economics of Strong and why at Fractio we feel it is undervalued if anything.
There are only 550,000 Strong in existence.
94.4% of the supply was destroyed, or as we say in Defi, “burned” when they launched, making it a scarce asset. The only way to earn Strong is to host a node or stake your Strong in a liquidity pool, which helps to bolster Strong’s value.
Remember that every time you create a new node, you lose that Strong forever, only slowly earning it back over time.
They have created what we call “circular economics”, and it’s quite beautiful.
This is also the reason why Strong has continued to perform so well when the market has not as I pointed out at the beginning of this article. With each new person coming in and staking 10 Strong each time they create a node, it takes that Strong off the market and circulates it back into their ecosystem via rewards.
What if the supply runs out?
There have been some concerns around the small supply issue, with a number of people worried that the supply could run out; but we believe Strong has been making the right decisions, especially when it comes to growing the protocol above and beyond Ethereum.
They recently launched the Strong solution on its second blockchain, Polygon, with promises of launching on Fantom next. Why wouldn’t these blockchains want the Strong solution? It’s only going to make them more secure. This creates new financial opportunities for Strong and the holders of the tokens, which are you and me.
But not only can they make blockchains better, they can also power decentralized applications. Most recently supporting Sentinel, a global network of VPN applications that enable private and censorship-resistant internet access.
Just imagine how much money companies in the future will want to pay Strong for their solution? This makes Strong in my opinion one of the most exciting tech companies around, and very few people know about them.
Ya, you are early!
Where does Strong go from here?
Eventually, these nodes will be able to run all kinds of applications on top of them in a decentralized fashion. Imagine a web hosting company that pays its customers Strong rewards to host their websites. In crypto, the entire financial model gets flipped on its head, and everyone is incentivized to participate in the security and redundancy of the blockchain.
Strong is also working on StrongChain, which will be its own blockchain.
I mean if they can make other blockchains better, why not build their own?
Additionally, there have been rumors about Strong becoming a DAO or a decentralized autonomous organization. They are already helping to become more decentralized, so why not become a decentralized company themselves? This is really living your core values.
Decentralizing the company would put the power back into the hands of the investors. As investors, we would be able to vote on the direction of the company using $Strong as a governance token.
Governance is one of the most important aspects of blockchain, and anyone who is holding tokens in their wallet from a project they have invested in, can vote for major changes to that project, and help shape the future of the organization. In blockchain, everyone is an owner and takes part in the success of the outcome.
Some speculate a Strong governance token would create a new opportunity for a second type of token and we’ve heard rumblings that the token name could be called ‘Stronger’.
In theory, ‘Stronger’ would be the utility token that would be able to have a much larger supply, removing people’s fears altogether that the Strong token supply will run out. Stronger could be used as a currency of sorts to pay for applications and services.
What are some of the risks?
It came as a pleasant surprise that about 6 months into investing in Strong, I found out that I knew the CEO David Moss from years ago building web2 technology companies. That certainly put me more at ease when it came to making the big investment I recently made into Strong.
Regardless of my comfort level in David, I have been in this project for over a year, and have seen exactly how the team reacts to tough situations and has kept their road map promises.
The team has done a really great job in removing a lot of my fears and giving me confidence.
Outside of market competition, or a security disruption, I don’t see any major risks that would cause Strong to quickly disappear. Even if the price goes down 75% from here, it’s still making an insane amount of money that I would never be able to make in the regular world, especially for doing nothing.
There is always a risk that new people stop buying nodes, but I feel like Strong has a solid solution that is solving a big problem and as long as they continue to launch on other blockchains and power decentralized applications, there will be as much of a need for Strong as there is a blockchain.
There is also the risk that supply runs out. However, Strong has hired an economist that has been working very closely with the team to ensure the supply doesn’t run out. For instance, they are soon going to be introducing a “decay” model (currently being tested on Polygon), which slowly over time, will reduce the number of rewards. I am completely ok with this, for two reasons. First, you can simply add more nodes to counteract the decay you would receive, and second, it was not that long ago they were a week away from halving rewards completely.
However, there was a huge community outcry not to do this, and Strong being a company that listens, decided to postpone a halving indefinitely.
My only concern is that Strong could be better at their communication skills and marketing strategy. However, I am giving them some rope on this, as I feel like they are focused on the tech at the moment and both of these things will come over time. I certainly am here to help if they want it. Hey David, if you are reading this…
So what is Fractio and what does it have to do with Strong?
One of the ways to ensure that Strong is successful is to have as big of a community as possible with as many people owning nodes as possible, even if those people cannot afford to buy their own node.
Strong needs a middle class to survive, like any good economy.
You don’t want a whales only game. You need smaller players in the economy to take a bigger piece of the pie. The long tail is important. The more people in Strong, the more decentralized it becomes.
Most of the middle class has been priced out of Strong where a node costs around $5,000 today to create.
We saw a big opportunity to not only allow people to own a node at the fraction of the price, but by providing a way to fractionalize nodes, we are helping to keep the ecosystem sustainable.
Enter Fractio Finance
Fractio fractionalizes Strong nodes by way of an NFT. Simply by holding a Fractio NFT, you can start earning Strong rewards, but at a fraction of the price.
Ten times less actually.
The cost of one NFT is roughly $500. Sure, it will take longer to see that $500 back before making a profit, but you also don’t have to come up with $5,000.
Fractio also benefits existing node operators. Like myself, they see Fractio as a hedge against the decay model.
We also make buying and giving friends and family the gift of passive income, very easy. I have used Fractio as a thank you for someone helping me out, or a way to get a family member involved, without having to spend countless hours helping them understand how Strong works, and helping them keep up to date with all of the latest news.
We also decided to launch Fractio on Avalanche, one of our favorite blockchains, that has lightning speed and virtually zero gas costs, so that when we eventually distribute the rewards, there will be a lot more profit for everyone to go around.
Our strategy and use of funds:
Like anything in finance, when you can pool resources you can afford a lot more.
We saw a great opportunity to not only be able to buy a lot of nodes together much faster but via compounding, increase the number of nodes very quickly.
We created a model for 3,000 NFTs, with 2,850 of them being for sale to the public, and the other 150 to be given away to future hires, contest winners, and partners that can help get us exposure.
Each NFT costs 6 AVAX (on the Avalanche network) which is roughly $500. Our goal is to raise $1,425,000 through the sale of these NFTs.
85% of the total raised is going to buy as much Strong as we can get, while the other 15% is set aside for company operations and team members.
We also plan on spending some of the funds raised on engineering, with a plan to build a bot that will help us automatically claim and distribute funds without the need for human intervention.
90% of the rewards profit will be shared with each holder of the NFT, while 10% will go to Fractio to fund operations, salary, marketing, engineering, and partnerships.
Once we create a solid model, our plan is to expand what we are doing on other blockchains that Strong will be on. We are also looking into supporting other passive income protocols.
Note:
It’s important to note that the price of AVAX and Strong fluctuates and as a result, we may not end up with our goal amount. But we do promise to spend all of the 85% raised on buying as much Strong as we possibly can.
Compounding:
Compounding is incredibly powerful.
To give you an example, assuming we are able to purchase 200 nodes from our raise, and we claim rewards once per month, 200 becomes a little over 3,000 nodes by the end of 12 months.
Assuming Strong stays at $500, 200 nodes make $10,000 a day. 3,000 nodes would make $150,000 a day.
Perfect compounding will be a very hard thing to do, especially since gas fees will keep us from claiming at certain times, but we promise to do our best and continue to compound until we decide as a community when we should start to distribute rewards, this will be done by a Snapshot vote.
ROI:
Our plan, for now, is around the 11th or 12 month to start sending rewards. Our goal is to compound aggressively until we get to a point where 1 NFT = 1 Node.
If you were to buy your own node for $5,000 it takes around 100–110 days to get this $5,000 back before you are profitable.
Owning a Fractio NFT will take longer to get your $500 back, but, it's 10x less expensive.
Assuming Strong continues to stay at around $500, once we start to distribute rewards, your $500 investment could start to see a monthly return of $1200-$1,500. That is a 3x on your investment, EVERY, SINGLE, MONTH.
This is the beauty of passive income.
Team:
Fractio was founded by doxxed web3 entrepreneurs Matthew Spurr (https://twitter.com/MatthewSpurr) & Daniel Kempe (https://twitter.com/danielkempe), along with myself Fungibles (https://twitter.com/fungibles3)
To learn more about the team visit: https://www.fractio.finance/about
To learn more about Fractio, please visit https://www.fractio.finance/ and join our amazing Discord community https://discord.gg/YWmPwBAefs.
Final thoughts:
My purpose in life is to help everyone succeed while spreading wealth.
Strong has become life-changing for me personally. In addition to helping me feed my NFT addiction, it has allowed me to afford many things that save me time and allow me to use that time to focus on my kids and the things in life that make me happy.
While we don’t control the price of Strong and cannot make any promises to exactly how things will play out, I plan on doing my best and am fully focused on making Fractio successful.
I’m excited to be able to help others make passive income so they can use their time here on Earth however they damn well choose.
Love, fungibles
Fractio.Finance has no official affiliation with StrongBlock, we just love what they are doing and want to make being part of what they are doing more accessible to more people.
Important links:
Set up Avax on metamask: https://support.avax.network/en/articles/4626956-how-do-i-set-up-metamask-on-avalanche
Bridge funds to Avax: https://bridge.avax.network/
Mint: https://www.fractio.finance/get-started
Join our community: https://discord.gg/YWmPwBAefs
Follow us on Twitter: https://twitter.com/fractiofinance
Read our FAQ: https://www.fractio.finance/faq
