It's a pretty strong assumption to make that price would be entirely unaffected by something like 20-25 % increase in supply.. Annually.
For two years I believe, then the intention is to have the DEX fees cover this. And it also fails to consider that there would be many investors who would not just dump all that Tao on the market but use it as delegates and/or stockpile enough to run another masternode.
But of course you're not only commenting without knowing that, or ignoring it, but you're looking at it in isolation without the rest of the ecosystem being considered.
Oh the docs? The docs which are also still mostly unattributed verbatim copies of Tomo documentation?
A) it's already well established and even specifically disclaimed in the introduction that it's a work in progress
B) you're lying again, all the attribution is still there in the commits
C) if you're implying the documentation should be rewritten from scratch just to please you, that's just dumb and you should feel silly for suggesting it
You know what isn't allowed, according to the license of that?
Changing the copyright notice.
You can do basically whatever you like with it, as long as you leave the copyright notice intact.
Guess what Bryce didn't do?
If you're referring to
https://docs.tao.network/products/taoissuer/termofcondition/ then it's been fixed. Thank you for helping out! See? You can be useful! Good for you, little buddy!
I think I'll paste the economics and tech specs section of my last post down here since you've pushed us onto a new page. Thanks for keeping the thread surfaced, BTW.
Anyway, I'm going to now post about something more interesting than wasting my time verbally fencing with you.
Let's talk a little about a couple of the technical specifications and the masternode economics.
I'm really looking forward to setting a masternode up for myself. This is what I've been waiting for; creating a sort of basic income for myself, quite at contrast with the short term mindset of the troll accounts hovering gnat-like around this project who all are obsessed with dumping coins.
So first off, the new EVM-based Tao network will be DPOS as previously mentioned, and will activate the masternodes which have been discussed since the Tao launch but never implemented until now. For this explanation I will use the abbreviation mn interchangeably with the full spelling.
Tao will feature 5 second average block times and the block reward will be 1 TAO per block. This will lead to an average 17,280 blocks per day, and the same number of TAO generated daily, which will be disbursed to all of the masternodes as well as to the delegates pledged to those masternodes.
For each TAO going to a masternode, 50% goes to the pledged delegates split proportionately to their pledges, 40% goes to the owner of the mn, and the balance goes to the board of governors to fund further development of the network.
So
for each TAO disbursed, .4 TAO will go to the operator, .5 to be split up proportionately to the delegates, and .1 to the board of governors.
The board of governors will be elected from the active masternodes by all Tao holders by amount of pledges per mn.
DPOS will work better for people with smaller balances since they will always earn proportional staking rewards when pledged to an active masternode, unlike traditional POS blockchains where people with small balances often don't get a chance to stake.
To clarify terminology for those who aren't familiar with DPOS, a masternode is an active node on the network and in the case of Tao requires 100,000 TAO to set up. There can be a maximum of 150 masternodes at any given time, a number which has been discussed within the Tao community for a few years now.
Which masternode candidates will be active is determined by the amount of delegates pledged to a given mn. This means anyone who holds TAO can basically vote for a mn by temporarily locking their funds into a smart contract linked to that mn. This is called pledging delegates.
At first there will presumably be fewer than 150 mn candidates so anyone who sets up a mn following the detailed instructions in the documentation will participate as active masternodes. After more people set theirs up that will create competition and incentivize mn operators to make sure their server specs are as robust as possible.
And yes, this will be something best done on a server rented through AWS or DigitalOcean or a similar service, not on your laptop let alone a Raspberry Pi.
So, now let's run some numbers and talk economics.
As mentioned, there are 17,280 new TAO generated by masternodes daily. This would total 518,400 in a 30-day month, or about 6.3 million in a 365 day year.
We'll consider two scenarios. One will be an initial scenario where we'll assume 25 masternodes in operation early on, the second will be further down the road when there are the max 150 mn in operation. We'll focus mainly on monthly income because I like to think of it like a basic income of sorts, or you could think of it as a business with monthly costs and profits if you prefer that model.
I won't bother talking about hypothetical future prices but will just go through the math using 2 cents per TAO as the price, which is half the price of ~4 cents per coin as I write this on April 20th, 2020.
Prices are in USD and should be considered examples. The point of this exercise is not to make a promise of earnings, but give you the formula I'm using to reach my projected numbers so you may run your own numbers and of course check my math.
17,280 per day * .02 = $345.60 average per day,
$345.60 * 30 days in a month = $10,368 average per month generated in totalThis is then split between the block producers (masternodes) so
- if 25 masternodes, then $10,368 / 25 = $414.72 monthly average per mn
Masternode operator $414.72 * .4 = $165.88 monthly average
Pledged delegates $414.72 * .5 = $207.36 monthly on average, shared proportionately
and then the share to the board of governors $414.72 * .1 = $41.47 monthly avg from each mn
- if 150 masternodes, we'd be looking at $10,368 / 150 = $69.12 monthly per mn
Masternode operator $69.12 * .4 = $27.64 monthly
Pledged delegates $69.12 * .5 = $34.56 monthly, shared proportionately
and then the share to the board of governors $69.12 * .1 = $6.91 monthly from each mn
Now there is no sunk cost for the delegates beyond what they paid for their Tao in the first place.
Mn operators OTOH have to pay server rental fees. These fees would start at about $40 per month, based on DigitalOcean pricing, and then as things become more competitive and resource intensive as the user base and blockchain both grow, this could soar to $320 a month, possibly more, again based on DO pricing.
So right out of the gate, it should be very profitable to run a masternode, assuming the 25 mn estimate is accurate.
I've given you the math so you can plug in alternative numbers and see how it works out if there are fewer to start with, but 25 seems like a plausible approximate starting number. 150 is the max possible so we can be confident projecting the worst case scenario given any given TAO price per coin.
I do think it is reasonable to assume that if more people buy the 100K TAO needed to run a masternode, this would likely result in the price of TAO rising due to slippage. Again, I'm not going to speculate here on future prices, but I don't think that's an unreasonable assumption. YMMV.
I've been having fun running these hypothetical projections, so I thought I'd share the math with you so you could run your own. This of course should not be construed as investment advice. If you see any errors in my math, please feel free to mention it and I'll be happy to revise my numbers.
