Best & Worst Case Scenario Rewards for Nodes
A couple weeks ago, we published an article that explored the incentives in depth for our upcoming protocol’s Supernodes and Masternodes.
In the article, we shared a few scenarios of the amount of rewards one can earn, depending on the number of nodes in the network.
To recap, there are three ways to earn rewards:
- Transaction fees
- PPN Incentive Pool
- Annual incentive
Our previous article explores the rewards you will be able to receive from transaction fees and the PPN Incentive Pool. In a nutshell, these are the rewards allocation for transfer fees, which will kick in from the second year of our Mainnet launch.
If you’d like to find out more, please refer to our article here.
Maximum Number of Supernodes
Given that the amount of rewards is dependent on the number of nodes in the network, there have been questions on what is the “lowest” amount a Supernode can receive.
While we have stated in our Bluepaper that there is an indefinite amount, we are expecting less than 5,000 Supernodes on our network.
Each Supernode has to stake a minimum of 100,000 PAL. If there are 5,000 Supernodes each with this minimum amount, there would be a total of 500 million PAL — this is the same amount in circulation from the public sale allocation of our ICO.
And while our network will be able to support this (read why here in our Bluepaper), we can certainly expect to see less than 5,000 Supernodes, especially when there are members of the community who hold more than 100,000 PAL.
Calculating the Annual Incentive
The annual incentive pool is equivalent to 20% of the token supply and will be spread over up to 10 years, as shown in the table featured below:
This is a projected table of rewards for Supernodes for the first three years, shown with a varying number of nodes in the network:
In short, even with 5,000 on the network, a Supernode can still get about 20% ROI, receiving almost 20,000 PAL in the first year.
In our previous article, we highlighted how 1,000 Supernodes on the network will see an 82% ROI. However, if there are lesser Supernodes in the first year, this means a higher ROI. For example, 500 on the network will see a 140% ROI.
If you’d like to make your own calculations, you can do so with the following formula.
Annual incentive pool for that year ÷ total number of lots
Each Supernode is allocated 1 lot, regardless of the amount staked. Each Masternode is allocated 10 lots, regardless of the amount staked. Since there is a fixed number of Masternodes (21), the total number of lots Masternodes can be calculated as 21 x 10 = 210.
Gearing up for Our Decentralised Protocol
Each week brings us closer to the launch of our protocol. Our Testnet will be ready for users in a little over a month’s time. Our Mainnet is also still on track to be launched by the end of the year.
If you have any other questions on our protocol, nodes or just about anything PolicyPal Network related, don’t hesitate to ask us on Telegram!
About PolicyPal Network
PolicyPal Network is a decentralised insurance protocol that uses data to bridge the gap between consumers and insurance providers by providing a new level of accessibility within the insurance ecosystem. The company also works with insurers to provide CryptoProtect insurance coverage for digital assets and smart contracts. PolicyPal Network is a member of Singapore Fintech Association and ACCESS. PolicyPal Network’s affiliate entity, PolicyPal Singapore, has an active user base of 50,000 for its app, which helps users to manage, buy and optimise their insurance policies.
Currently, PolicyPal Network has partnerships with insurance companies, FWD and Ergo, to explore potential use cases of our decentralised insurance protocol together. Furthermore, we have also established collaborations with blockchain projects NEM, QTUM, Sentinel Protocol, MediBloc, Digix and traceto.io to offer CryptoProtect and mainstream insurance products for the projects themselves, along with their respective communities.
Learn more about PolicyPal Network:
Telegram (Chinese): https://t.me/PolicyPalNetworkCN
Blog (English): https://medium.com/@policypalnet
Blog (Chinese): https://www.jianshu.com/u/04e398cadb84