Masternodes - The logic of rewards and payments

Masternode Payment frequency and first reward delay


As of late I wish to give every masternode investor (and all who wish to change into one) an advent to the masternode reward payment cost common sense. I give an explanation for, how the reward frequency frequency is calculated and why the primary reward frequency has a delay.

Typically, all calculations rely on quite a lot of components, such because the selection of masternodes within the community, blocktime and the closing payout time.

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However first let’s check out the necessities a masternode will have to face to be able to generate a reward and the way it continue after beginning:

If all requirments are met, the masternode seems within the international list. New masternodes becoming a member of the community (and nodes who have generated a reward) are positioned on the finish of the records.


Working, live masternodes which can be restarted the usage of the rpc instructions ‘masternode start’ or ‘masternode start-alias’ also are positioned on the finish of the worldwide list. The use of the brand new rpc command ‘masternode start-missing’ avoids this.


As masternodes are moved to the tip of the worldwide list, the remainder masternodes slowly migrate against the highest of the record. As soon as a masternode reaches the highest 10% of the worldwide list (the placement is determined by their time since the last reward), it's eligible for variety from the choice pool.


Formula = X * 10 / 100


Assuming there are 1000 working masternodes (x) within the community, signifies that the 100 newest (by way of reward time) masternodes are within the selection pool.

Once in the selection pool, the rewards become a probability. The blockhash 100 blocks ago deceide which masternode will be selected for next payment. The masternode with the closest numeric hash value to that blockhash is selected for reward. So, because selection is determined by blockhash entropy, the masternode could be left in that 10% list for quite some time until it gets a reward.


However with particular parameters, like the quantity of masternodes within the network and the blocktime, we will calculate the moderate frequency of a payment:


Forumla = (X * Y) / 60 / 24 = X / (24²) = X/Z


For instance we take a look at a coin with 1000 masternodes (X) within the network and a block time of 2.5 (Y) mins (= 1440 / 2.5 = 576 blocks in keeping with day (Z)). This leads within the following consequence:

1000 * 2.5 / 60 / 24 = 1.736 days or 
1000 / (24 ^ 2) = 1.736 days or
1000 / 576 = 1.736 days

In the end, we solution the query why the primary masternode payment has the sort of delay in comparison to the avg frequency.

To start with, we will use the next (easy) formula as a commonplace rule to calculate the time to the primary payment:

Formula = AVG * 2.5


We will use the typical time for a payment and multiply it by way of 2.5, as a result of a masternode is going in the course of the frequency period two times (+ broadcast time; + time in selection pool). So we will summarize a listing of prerequisites for the primary reward as follows:

  1. The collateral enter will have to be a minimum of as many blocks “previous” (+1) as masternodes within the network exists - new MNs are positioned on the finish of the list.
  2. The position in the masternode reward list is determined by their time since the last payment matching to the network, not the blockchain.
  3. The “winner” in the selection pool will be choice by probabilities.

This wait time additionally prevents masternode holders from repeatedly bringing down their masternodes and restoring them to benefit from staking rewards within the “see-saw” set of algorithm.


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Published on: 6/6/19, 9:10 AM