Shared Masternode Services and Transparency

Hello again! Thank you for taking the time to read this article! This article will discuss the transparency of several Shared Masternode Services and discuss the differences of each.

The services we will be covering in this article are TRTT, MIDAS, GTM and CHT (if you would like others to be covered please let me know via Discord).

The areas we are going to discuss is the basic transparency such as the information pertaining to masternode addresses, reward distribution (especially Instant MNS), fees, and total number of masternodes running.

So the first service we are going to talk about is TRTT otherwise know as Trittium. If you already did not know this coins original use case was for loans and not shared Masternode hosting, but they moved to the Shared Masternode scene due to the fact that they have struggled with getting the necessary rights to have such a service LINK.

So here is a snapshot of a dashboard view of their site:

LINK

As you can see the state to host 79 coins, 2198 Instant MNs, 3366 investors and 118 Cold Nodes hosted as of this snapshot. Ok so lets discuss what this can be interpreted to show.

79 Coins hosted: this is pretty much self explanatory and verified on the main page.

2198 Instant MNs: this shows that they currently have 2198 MNs that pay Instantly as shown in their Article they use a method commonly known as “Robbing Peter to Pay Paul”.

SNAPSHOT OF TRTT MEDIUM ARTICLE

LINK

Here let me explain what this means:

Lets use these examples: MN Collateral is 1000 coins, TRTT had 10 Instant Nodes for the coin, and there no investors in the buyin for the next node. Each MN earns 100 coins per day for a total of 1000 coins per day and there are 10 investors total in these nodes. (We are not calculating fees with this calculation)

So these investors in this scenario without any investors in the buyin getting paid from the Instants should earn the following:

Old Investors 1–10: 100 coins per day
So now lets add a user in the buyin for the next node whom has 500 coins earning from the previous nodes (nodes owned by Older Investors).

Old Investors 1–10: 95 coins per day
New Investor in buyin: 5 coins per day
So investors are losing 5 coins per day as their investments are now paying the user in the buyin, hmmmm…….

So what if 2 of those nodes go down and do not earn for 24hrs? Well first off now the other 8 nodes earn a total of 800 coins now so lets take a look:

No investor in the buyin:

Old Investors 1–10: 80 coins per day
Investor with 500 coins in the buyin:

Old Investors 1–10: 76 coins per day
New Investor in buyin: 4 coins per day
So Investors are losing 24 coins per day as there are nodes down and their investments are paying New Investors.

There is one more way this could be being done let’s take a look:

Ok same scenario but the original Instant MN collateral was supplied by the developers of the coin so only 9 nodes have investors in them as the Instant is owned by TRTT. So now we have 9 Investors each with 1000 coins in 9 nodes each still earning 100 coins per day.

No Investor in the buyin:

Old Investors 1–9: 100 coins per day
Investor with 500 coins or 50% of a nodes collateral in the buyin:

Old Investors 1–10: 100 coins per day (if not paying them from the Instant)
New Investors in the buyin: 50 coins per day (if not paying them from the other 9 nodes).
This is the proper way to have an Instant service where New Investors in the buyin only get paid from the 1 Instant Node dependent on their % invested compared to collateral required.

But wait what happens to the 50 coins that the Instant earned that was not distributed to New Investors? After speaking with developers for a few projects that TRTT is partnered with, they stated to me that they did not supply an address to TRTT for these unused rewards to be paid to, so what are they doing with those rewards? I’ll let you think about that

Most likely the same method Midas uses that I will discuss next!

Pros:

Everyone Earns
Earnings are Instant for everyone

Cons:

Old Investors earnings are being distributed to New Investors
Unused Instant Rewards unaccounted for

Now lets talk more on the transparency of their service in regards to masternode addresses. Basically these node addresses are not visible unless you are a member with coins in that specific MN. So visibility is limited to only the Investors affiliated with that particular node. Why not allow these addresses to be publicly displayed? Especially the addresses related to their Instant MNS they host.

Ok last but not least I wrote up the fees information in another ARTICLE but I would like to point forgot to mention one aspect of TRTT’s handling of rewards for fees. How is their fee structure adjusted when the nodes do not generate the 0.167 EUR required per day? They are not, they still take the 0.167 EUR from your account! So, if you have it set to take rewards from the earnings to pay the fee and it does not cover they will charge your account in TRTT coins and if you have it set to TRTT they will still charge the 0.167 EUR in TRTT even if you only earned say 0.01 from the node.

Posts from TRTT’s Discord:

“When we receive payments in other coins we must sell them on the market, and that’s not good for your investments in the long term.”

Overall the transparency:

Instant Method they use is not favorable to investors
Charges Investors for low ROI coins more than they make
Service claims to not sell rewards but research shows they do
Does not offer Proof of Stake

Now we will discuss MIDAS and their platform in regards to transparency and methods:

In case you did not know MIDAS announced recently that they will be delisting all the “shitcoins” not sure what they meant but that is all they said.

This was the announcement in their discord channel:

“ First of all, the masternode market is almost dead. There are no new investors, no new good coins, low volumes on all exchanges. The recent BTC rise is manipulated and will make masternodes only bleed harder. You can see the results in the latest price movements of every coin on Crypto-bridge.”

“ The first thing we will do is delist all the shit masternodes. We will create room for the investments which can survive this market. Then the pivot.”

“29.04.2019–12.05.2019 With the growth of the BTC price many masternodes decreased in price more than 50%, which lead to the lowering of our income. Considering the overall decrease of the market cap we decided not to sell most of the coins to not push their price even lower. All btc earned were get from our sell orders.

Basically Midas just stated that they sell coins as normal practice to make their earnings duh all services do this it is not anything new nor is should be thought that any service does not. But let’s looker more into it shall we.

Here is Midas’s TOS for their platform pay attention to the statement about unused Instant Rewards:

“8. To list a coin to the platform, the project team is required to provide collateral equal to one MN and process payment of the necessary listing fee, paid in MIDAS.

- In the event of an increase of collateral, the project is required to provide the balance of the increase to ensure that the Instant Share node remains operational.

- Rewards not proportionally dispersed to new Investor’s shares from the Instant Share node are handled by Midas”

What does that mean exactly? Its pretty clear the Midas is selling those coins on the exchanges if the coin is listed! And the fact that this is a requirement for listing Developers should stay far away or require Midas to send the “Rewards not proportionally dispersed to new Investor’s shares” back to them obviously.

Here is Midas’s Stats according to their website:

LINK

Not bad 3802 Investors and 1950 Masternodes! Well just like the previous service their is no publicly visible way to verify these numbers. We discussed Midas’s fees in another Article (https://link.medium.com/yuFKBvvkXW) and showed how they can get pretty high if you do the math. Also they have the same issue with charging fees higher than the nodes themselves make no cap on fee % compared to earnings. They go as far as allowing Investors accounts to go into the negative due to this.

Midas also just announced their “Midas Lock-In” feature which allows them to not charge any fees. Let’s sit back and think about what we just discussed in this article and then compare that to a no fee structure for hosting. Ok so how does Midas survive with this method, well it is simple let’s go back to how they list coins and what happens the unused Instant MN rewards (“ Rewards not proportionally dispersed to new Investor’s shares from the Instant Share node are handled by Midas”). So there we have it they continue to take rewards from the coins they host on their platform and obviously they then sell those coins on an exchange.

As far as transparency is concerned they are pretty closed off for anyone to be able to see exactly what they do. In regards to masternode addresses, basically the node addresses are not visible unless you are a member. So visibility is limited to only the Investors affiliated with that particular node. Why not allow these addresses to be publicly displayed?

Overall the transparency:

Instant Method they use is not favorable to investors or projects
Charges Investors for low ROI coins more than they earn from them
Service claims to not sell rewards but research shows they do
Does not offer Proof of Stake
Midas Lock-In Scam

The next service we will discuss is Gentarium otherwise known as GTM Shared Masternode Service. Gentarium has been around for some time and is one of the largest services out there. They originally began as a Node hosting service only, where Investors did not need to send coins to them for hosting they simply supplied the data and the node was hosted on their platform and users were required to pay fees in GTM for this service. This service is known as “Cold Node Hosting”. This allowed GTM to excel and grow exponentially as Investors did not have to worry for the safety of their coins.

Recently GTM entered into the Shared Masternode Service, this method requires users to send the coins is as it can not be done any other way. We discussed in our previous Article (https://link.medium.com/yuFKBvvkXW) how their fees work based on their “Tariffs” but we went ahead and broke that down and did the math so Investors could see what it looked like for BIR as an example.

Here is a snapshot of GTM’s Shared MN dashboard

LINK

As you can see GTM can charge anywhere up to 90% fees for a hosted coin on their service. This is understandable based on their fee structure and falls in line with every other service out there. GTM, TRTT, MIDAS, and CHT allow for users to opt in to pay those fees in their particular coin. (GMT, TRTT, MIDAS and CHTC)

After research it is safe to say that GTM’s method of Instant Node service is fair as they only pay Investors whom are filling the next node from an Instant MN supplied by the developers. But, the question is still to be answered what do they do with the unused Instant rewards not given to those Investors? Do they send them back to the developers? Do they keep them like Midas does and sell them? This question can not be answered as they are not exactly transparent with their practice.

So GTM follows the same standard as TRTT and MIDAS as far as transparency. Node addresses are not visible unless you are a member with coins in that specific MN. So visibility is limited to only the Investors affiliated with that particular node. Why not allow these addresses to be publicly displayed? Again especially the Instant MN addresses!

Overall the transparency:

Instant Method they use looks favorable to investors and projects but unsure what they do with unused rewards
Charges Investors for low ROI coins more than they earn from them
Service claims to not sell rewards but research shows they do

The last service I will be discussing will be CHT otherwise known as CryptoHashTank. CHT has been around for just over a year now and is steadily growing. CHT offers share masternode hosting and POS for several coins. We discussed in our previous Article (https://link.medium.com/yuFKBvvkXW) how their fees work based showing that they practice the same as all other services.

Here is a snapshot from their homepage

LINK

They show 2614 Active Members, average withdrawal time, 78 coins hosted and a total of 967 MNS. The user base is quite large and their withdrawal extremely low compared to many other services. The hosted coins can be seen on their homepage and you can access them easily. They show 967 MNS running and we can believe this as they display all addresses of their masternodes and users publicly which is the most transparent of any other service.

CHT allows Developers to host their projects on their platform either normally or with Instant ability depending on the Developers request. How CHT runs Instants MNS is clearly shown on the coins page. The Instant MN is labeled as an Instant and the address is available to see. Investors in the buyin for the next node are paid from the Instant Node rewards only and not the pool of Investors owned nodes as other services do. Any unused rewards are then sent back to the respective developers to the address they provide daily when payments are processed for the Investors. Anyone can view the developers payment address as it is displayed on the coins page just like any other address. Here is an example showing this to be accurate (https://expl.xgamingup.live/address/XZ22wUKtRaAYT5pYZgf8GPKiZHSZvcupv5). Here is another (http://explorer.mintd.net/address/MAjwyLz3otKggHsjNmCAzBkNWKpx3mN7XC).

CHT is very transparent about their activities and if you view the link above you can see that each day around the same time payments were made to the XGA developer address as promised. The fluctuation in amounts is due to new Investors joining and earning from the Instant along with the normal decrease due to increased MNS on the network.

CHT has also instituted what they call “DEV Funded Coin Listing” this is how CHT is battling the low ROI coins in the cryptospace that have a solid project and investor base. While other services charge more than the nodes earn to their investors CHT reaches out to Developers to arrange Fee Free Hosting of their projects. This works by allowing the Developers to cover the cost of each node monthly via CHTC instead of charging the Investors fees that are more than the earnings of their investments.

Overall the transparency:

Instant Method is favorable to investors and projects
Service displays all addresses to public
Innovative method of hosting low ROI coins
Overall Comparison of all the services discussed today:

It is clear that all services need income to cover expenses, this means that all services have to sell the rewards from the fees they charge from the nodes they host. There is no denying this aspect and the previous Article (https://link.medium.com/yuFKBvvkXW) shows how each service compares. Each service allows for Instant MN hosting but Midas and TRTT keep unused rewards and pay new Investors from Investor owned MNS rather than just the Instant. Midas also clearly keeps the unallocated rewards from the Instants an sells for additional income. GTM looks to properly handle their Instant MNS but their is no way to verify as they are not transparent enough. CHT properly runs their Instants by sending back unused rewards and only paying new Investors from the Instant and not from Investor owned MNS. CHT is the only service that is absolutely transparent by showing all information for every project hosted to the public.

MIDAS has been at it for awhile it looks like! https://bitcointalk.org/index.php?topic=5054792.40