Masternode Series: An Analysis of Flux
Welcome, degens, to my masternode series. In my first article, I wrote about how to invest in masternodes without getting scammed. Now we’re going to continue the series by examining Flux (formerly ZelCash). What’s the project? What’s the problem it solves? And is it profitable to run a Flux node? Let’s get started!
What is Flux?
Flux is decentralized computing for Web3. Think about it this way, let’s say you’re Crypto Raiders — a game that uses NFTs. You need processing power for your game to run and you have three ways you can get it. You can buy the servers and run them yourself, you can use a service like Amazon Web Services (AWS) or you can use a decentralized network like Flux.
Let’s set aside the fact that the decentralized computing model of Flux fits the Web3 ethos better than the other two options for a moment. I would argue that a service like Flux is an objectively better solution for a company like Crypto Raiders for two reasons:
- It’s cheaper than running a centralized server.
- It’s more robust than either a centralized server or a centralized service.
“But wait,” I hear you say, “Amazon is a huge company. Surely they can deliver consistent service.” True, though they still have service interruptions when their data centers have issues. On the other hand, Flux has nodes running all over the world by individuals like you and me. The more nodes that go online, the more robust the network becomes.
Not only can the Flux community offer a more consistent product than a service like AWS or Microsoft Azure, but they can also do it at a lower cost.
The Flux Team
The team at Flux is fully doxxed. A fully doxxed team gives me more confidence in the longevity of the project — especially a project focused on blockchain-as-a-service. Us degens might be fine spending tens of thousands on JPEGs without knowing who’s behind them, but companies still like to know who they’re doing business with. A doxxed team is vital for a project operating in the same space as companies like Amazon and Microsoft.
The Flux Roadmap
Real talk for a moment — roadmaps have zero predictive value in the crypto space. They’re ambiguous at best and outright lies at worst. That said, I still look at roadmaps to see what achievements a project has made. The Flux roadmap shows a steady history of achievement and impressive partnerships.
The roadmap from Q2 2022 and beyond leaves a lot to be desired. It’s incredibly vague, which is — unfortunately — par for the course in the crypto space and could be a red flag. Given the past successes of the Flux project, I’m willing to trust that the team has a more comprehensive plan than the five bullet points their roadmap shows for 2022. That’s a gut feeling more than anything, though. DYOR.
Is A Flux Node Profitable?
It used to take a minimum of 10,000 Flux to stake for a node. At current prices, that’s roughly $15,000. Fortunately for us plebeians, Flux recently reduced the stake needed to run a node significantly. You can start a Cumulus node (the lowest tier) for a 1,000 Flux stake.
The amount you need to stake for a Flux node may have gone down, but the hardware requirements have gone up. That means your ongoing costs will be higher. Here are the current hardware requirements to run Flux nodes:
You can host a node on a Virtual Private Server (VPS) for about $20 a month or build a Flux node from a Raspberry Pi 4B for about $300.
Here’s what you can earn as of this writing for each node:
Let’s dive into the profitability of a Cumulus node to see what the Return on Investment (ROI) of a Flux node is. Remember that your staked coins are still yours. You can choose to stop running your node and liquidate them at any time.
Cost of Your Stake: $1,500
Monthly Costs: $20 (Flux says $11, but I couldn’t find it that cheap)
Monthly Earnings: $38.33
Annual Earnings After Expenses: $219.96
Annual ROI: 14.66%
A 14.66% annual return isn’t amazing by crypto standards and you can certainly find higher. Of course, you’ll have to accept higher risk as well. In my opinion, 14.66% is pretty stellar given how robust the Flux project is.
Conclusion
Flux is a strong project with a doxxed team and a history of impressive partnerships. The project is relatively inexpensive to support at the moment and has a very low risk of failure. There are, however, other risks. The lower barrier to entry means more nodes will come online which means fewer rewards for each node owner. The monthly rewards have already dropped by about $15 from when I started the node a month ago and it’s possible they could drop further. That’s something to consider if you’re on a limited budget and looking for a project to moon.
If you’re looking to degen into a high-risk project that can give you 200%+ annual returns, Flux isn’t the right project for you. But if you’re looking for a blue-chip project that supports the growth of Web3, Flux could be exactly what you’re looking for.
Remember to do your own research and read the whitepaper before jumping into any masternode project.
If you want to continue the conversation, you can connect with me @CryptoDegenFML on Twitter or CryptoDegenFML here on Medium. If you liked this article, please clap for it (up to 50x) to let me know you enjoyed it. It’ll mean a lot to me. Thank you, fellow degens!
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
