A discussion from slack on the economics of running a Tao2 masternode:
I'll copy and paste the relevant math for anyone who may not be able to read the screencaps:
"The BARE MINIMUM requirements are about $20/mo which can easily be made w/ staking at these prices. At current prices the network generates $3.60 worth of tokens every 30 minutes.
1 TAO per block, 5 seconds per block, 360 blocks per epoch
360 blocks = 30 minutes = 360 TAO
~$0.01 x 360 TAO = $3.60
…
Masternodes split the rewards w/ their stakers and claim 40% of the block reward, or .4 TAO
3:26
so with a $20 node it should take 2,800 blocks solved per month to break even. There are 17,280 blocks per day
3:27
There are a total of 150 slots for block producers
3:27
So you can see there’s a long horizon of mining profitability until the network becomes a top 100 network and competition or network load starts to drive folks out
518,400 blocks per month, or at $0.01 there $5,184 in new tokens minted per month.
Even with 150 masternodes that still allows for a single masternode to earn ~$32/mo"
Note that the math is based on a $0.01 price per coin, which is under the current price of ~$0.026/coin, and also based on there being the maximum 150 masternodes, which certainly will not be the case at first. We've estimated that perhaps 25 masternodes will be in operation at first, so each one would get a larger share than the above numbers.
Also worth noting that the max 150 masternode number is the same number which has been discussed in the community for a year or two at least. "It’s still the same design and intention we had 4 years ago, but updated with modern technology and markets in mind," to quote Bryce.
It should be far easier to get listed on new exchanges, "as the network is an ETH-based DPOS implementation it will be much easier to court exchanges to add TAO for trading since if they have an interface for ETH they have an interface for TAO, and implementing the token is extremely simple compared to how it is now.
Not to mention exchanges can run their own masternodes which even at low price and volume can generate enough income to be a profit generator."
Easier for exchanges to add from a technical standpoint, and they will have more motivation from a financial standpoint if they accept a masternode for themselves.
In addition to the financial incentive to run a masternode, anyone who holds TAO at the time of the migration to the EVM-based network will end up with a small 10-15% reward added on top of their existing Tao balance for sticking around:
"I revealed the bonus for current Tao holders this week. The time to migrate is approaching and there’s no reason existing TAO 1.0 holders shouldn’t benefit from the additional token liquidity we’re creating.
So we’re giving away 10%-15% (just to keep it a little unknown) to existing TAO holders as their tokens pass through the migration smart contract.
free money"
Masternodes create an incentive to keep funds locked up in the node operation, which keeps them off the market. Funds raised by selling the newly created coins will go toward supporting the price and liquidity:
"We created a whole shitload of tokens to give to projects to build on TAO as well as to sell in bulk OTC to speculators. The monies raised go back into market making at a rate of no less than 50%. With $5,200 a month in mining profits and $50,000 a day in volume there’s really very little profit risk."
More projects on the network = better price.
More masternodes = better price.
More exchanges = better price.
Market making = better price.
Just for those of you in the back who are only focused on the price.
