ShareRing Masternodes

Photo by Andrew Neel on Unsplash

What is a Masternode?

Originally coined by Dash, Masternodes, known as bonded validator systems, are highly privileged nodes in the network that provide more functionality, and in return, reap bigger benefits. They are the workhorse of ShareRing’s blockchain network. ShareRing’s Masternodes not only allow the ShareLedger blockchain to gain higher transactions per second but, at the same time secure the network from malicious activities.

When originally developed, Masternodes enabled only transaction-related services such as overseeing instant and anonymous transactions. However, as the concept has developed, Masternodes have been given more features, such as participating in governance and voting. With Masternodes, users are able to enhance the blockchain to suit their needs — facilitating egalitarian principles.

There are always entry barriers in place for becoming Masternodes. The possession of a significant amount of crypto is a must in every PoS blockchain, including our ShareLedger. Specifically, that number is 2,000,000 SHR ($40,000, based on SHR = $0.02). This ensures a limited number of possible Masternodes in every chain, which in turn provides benefits, as outlined below.

Masternodes for the ShareRing Blockchain

Why does a blockchain need Masternodes? The first advantage is higher throughput. Many users of the cryptosphere know very well the problem of the limited transaction bandwidth of Bitcoin & Ethereum, in comparison with other centralised systems, such as common fiat systems such as Visa or Mastercard. The reason is that transaction verification time is proportional to the number of nodes in the network & the inherent difficulty of the Proof of Work (PoW) algorithm. To verify a transaction, every node in the network has to receive, process and agree on that transaction to ensure the whole network reaches consensus. Having more nodes increases network delay and requires more network coordination. By delegating special services to a limited number of Masternodes, we reduce the number of participants in consensus formation, and hence, speed up our transaction speed and gain higher throughput, while maintaining consensus.

One might argue that this might go against the spirit of decentralization in a blockchain world. However, in ShareLedger, the Masternode privileges are not confined to high value stakeholders. By utilising Leased Proof-Of-Stake, every stakeholder who cannot afford to have their own Masternode, can become a part of the Masternode by leasing their stake to any existing Masternode.

Another benefit of the Masternode is the enhancement of network stability and loyalty. Becoming a Masternode allows a significant holder of SHR to realise an ongoing return on the initial investment. This incentivises the holder to operate by the blockchain’s rules. The ongoing returns on the staked investment encourages Masternode holders to support the best interests of the platform and contributes to the ecosystem as a whole.

Benefits of running a SHR Masternode

Becoming a Masternode provides users with access to the potential increases in value from owning SHR. Every Masternode will earn a percentage of the service fee for each transaction it processes. This serves as a passive income, allowing a Masternode owner to increase its holdings of SHR in addition to the current holdings.

How do I become a SHR Masternode?

Masternode Token requirements

For seed, presale & main sale investors, a minimum of 2,000,000 SHR is required to host a Masternode. For token holders who missed our seed, presale or main sale, the staking requirements will be at least double this amount.

Maximum number of available Masternodes will scale based on the number of transactions and the gas fee paid. The token amount required to host a master node down the line depends on earn rate and token price.

What if I don’t have enough SHR to be a Masternode?

To lower the Masternode entry point for SHR holders, an existing Masternode can also act as a pool allowing other SHR token holders to stake their token in return for a portion of the transaction fees for the hosting service. Essentially becoming a part owner of the Masternode. Pooling is achieved via a Decentralised Application (DApp) made available via the SHR wallet — simply search for an existing masternode and pool with them — a discounted price for seed, pre and main sale contributors is available.

For example, let’s say you only have 1,000 SHR available to stake. You can use your wallet to select an existing masternode and choose to pool your SHR with them. The Masternode holder may choose to take a % commission from your earnings (ie. If your earnings are 100 SHR per month, they could take 5%, leaving you with 95 SHR per month). The % fee is completely up to the masternode holder.

Priority will be given to holders that purchased their SHR prior to the conclusion of the main sale.

Potential Return on SHR Investment

We want to make sure the Return on Investment (ROI) is very high to start with (like the DASH ROI was initially), but with a low cost of entry for the people who participated in the main sale:

  • Estimated. 100,000,000 tokens available for distribution to masternodes in year 1 — max 50 nodes*
  • 500,000,000 in year 2 — max 500 nodes*
  • Final maximum number of Masternodes to be established once critical mass is reached. This will occur when Masternode count does not affect platform minimum transactions per second. (To be presented in the technical paper next week)
  • For the ‘masternode’ holder, if SHR holders pool with it, the holder earns a % of their stake. A Masternode can advertise to others via the wallet so that they may pool with it. The Masternode can also choose what % of the stake it charges.

Technical requirements

In ShareLedger, we plan to minimise a stakeholder’s technical effort in setting up a Masternode. Technical requirements for instantiating a Masternode are as follows:

  • A local server or Virtual Private Server (VPS) such as Amazon EC2 or Vultr. This server should operate 24/7.
  • A Static IP address offering reliable and stable connections to other nodes.
  • Dedicated storage space for ShareLedger data.

The ShareRing Network technology utilises Docker services to automate deployment processes. Docker daemon support is a simple, single docker-compose command. The Docker images will be uploaded to Docker Hub for the SHR Masternode holder to pull and run on their servers.

Being a ShareRing Masternode means becoming integral to ShareLedger. Not only does a token holder earn additional token rewards based on the transaction fees, the Masternodes also contribute to the ShareRing ecosystem to provide network integrity, security and speed.

The team at ShareRing thanks you for your continued support.

* Note: The max number of nodes may be subject to change, dependent on transaction volume and speed.