Crypto Review — Masternode And Staking Service (MASS)
High level advice — If you feel compelled to invest in something, at least read the whitepaper — https://mass.cloud/MASS-whitepaper.pdf
This one is a quick(er) read and does a pretty good job of laying out the market and approach. Basically there are problems with Proof of Work (PoW) as a consensus algorithm — namely that it, by design, chews up energy and that’s not great for the ole environment. Proof of Stake (PoS) is becoming more popular and MASS is offering a service to make it easier for the average crypto investor to take advantage of some of the benefits. PoS doesn’t have to end up as the “winner” over PoW for the project to be successful but the more market share it can lock down the better.
PoS Overview
I admittedly dont have a masters level grasp of PoS so if I get anything wrong let me know and I will correct it. This is very high level. Mr. Cooper wasn’t able to get a straight answer so I guess its up to me to lay it out.
Proof of Stake
To break it down in a very basic manner — Validating nodes on the network in charge of processing transactions do so by “staking” tokens they hold. If they act honestly then, just like in Proof of Work, they have a chance to receive tokens for their effort. If they do not act honestly then the tokens they stake may be burned. The downside is much larger than the upside so actors are incentivized to be honest.
Delegated Proof of Stake
Uses “delegates” to handle the consensus. This generally means less nodes actively participating but they have more at stake.
Along with ensuring consensus PoS systems can have governance built into the system, where the nodes vote on changes to the protocol or projects/initiatives the network should fund.
Problem MASS is trying to solve
To participate in PoS or DPoS systems there are hurdles:
- Generally a minimum amount of coins needed to effectively stake
- Staking is generally cumbersome to setup and maintain
This basically makes it impossible for the average user to participate in the benefits of staking, namely:
- Earning tokens for maintaining the network (can be thought of as interest on staked tokens)
- Ability to run a masternode which unlocks added benefits — Having a say in direction of the network, other added features.
You can think of it as a traditional bank deposit or note. You agree to lock up some of your capital, the bank uses that capital to fund its operations and grow, you receive some benefit (interest) for allowing the use of your capital. The more funds you make available to the bank generally the better rate you get (rich get richer), a similar model exists in PoS. MASS is providing a way to pool together to get those benefits with small individual contributions.
Mechanics
To participate you need MASS tokens. Once you have them you choose how many you would like to stake and to which coins you would like them staked. How this is handled is still to be worked out exactly and will likely be dependent on the level of funds they are able to raise. It may start out with set “portfolios” with percentages in a group of pre-chosen coins, then move to more user/community controlled groupings or a-la-carte options.
The staked MASS tokens will represent an amount of ETH of the underlying tokens (if there is $50m of ETH in the investment pool and 50m tokens then each token represents $1 worth of ETH). That amount of ETH is then used to purchase and stake the underlying tokens. There will eventually be different ways to receive returns but initially you will have a choice to reinvest tokens earned through staking or get a payout in the appropriate amount of ETH. For smaller accounts payouts will be small so there may be withdrawal limits since very small amounts wont make sense when network fees are taken into account.
Throughout the whitepaper there is a theme of trying to move to as much of an automated/hands off system as possible. The focus initially will be to keep it simple and that will generally mean — more decisions made by MASS team, fewer features, less flexibility. It is clear though from the time I spent in the telegram chat the past couple days that the team does not have any interest in any heavy handed control of the project, they would rather open it up to the community.
Possible Risks to project
1. Creating a pool of capital that may become a target for hacking
2. ETH outpaces the growth of tokens chosen by the pool
3. PoS doesn’t catch on and ETH and PoS tokens end up lagging
4. Not enough funds are raised and they cant hit critical levels of staking
I see 1 as pretty much a risk of every crypto project, they are using smart contracts on Ethereum so the security of the Ethereum network will be in play. Also I trust they will be more secure than how I personally secure my wallets. I know they are planning a stronger marketing campaign soon so hopefully 4 wont be an issue. For 2 I am looking at MASS as an easier way to get exposure to smaller market cap coins. I own many of the tokens that should be available and once I get a feel for the platform I will likely close out my positions of direct ownership and gain exposure through MASS. Being able to withdrawal in the underlying token is on the roadmap as well so those that are only looking for direct exposure should be able to participate as well. Owning them through MASS has the same potential opportunity costs with owning any asset vs another but I will at least get the staking benefits I would miss out on from having the shares sit on an exchange or wallet. Additionally, it will allow for an easy method of diversification — one input/output instead of managing multiple assets on an exchange.
Underlying this is the current plan for Ethereum to move to Proof of Stake. There is no set date, but in the next 12 months would likely be a conservative estimate. There are a lot of other components of the various tokens to take into account but when it comes to any concerns about the viability of PoS, Ethereum successfully making the move will be huge in building confidence in the approach.
Token Creation
from the whitepaper
During presale and the ICO, purchases can receive extra tokens up to a certain limit9 . We are setting a cap of 10 million tokens to be sold during the presale. During this time, all purchases will be given 30% more tokens. Once the ICO starts, the bonus structure will change to the following:
Phase 1 of the ICO will offer 20% more tokens on purchases on the first 5 million tokens. This is outside of the tokens sold during the presale.
Phase 2 of the ICO will offer 10% more tokens on purchases on the next 10 million tokens.
Phase 3 of the ICO will offer no bonus tokens and a flat exchange rate of 1000 tokens per Ethereum is set.
Max tokens created will be 61 million
What I like about MASS
The selling points are easy to understand even for the non-crypto enthusiast. The project should be low overhead and at its core it is offering a service that makes something generally difficult easy. There is a long history of that being an effective model. You could argue that they may not need a native token but I do think it makes things easier to roll out and likely easier to implement new features in the future.
There are still plenty of tokens available in the presale — the presale has no minimum and a 30% token bonus (1300 per ETH). It is less of a traditional presale and more of a way to build up a smaller initial community that is invested in the project to help with growth in the future. ~35% of the presale was filled in the first 2 days so get out there and cultivate some MASS!
Disclosures: This is not investment advice, Do your own research, I have purchased some MASS so I am obviously biased, only invest what you are comfortable losing.
Happy Investing!
