If you give the money to someone else, you can get 155% return. Can the PoS node business work?

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If in the first half of 2018, someone told you can use a Token to dig, you might think this is a MLM program, but now after block chain to 3.0 development stage world, there are more and more block chain project provides system-level tokens, mortgage to "production" new tokens, quite a few new block chain project issue rate can reach 20%.

At present, Livepeer is particularly eye-catching among such projects that can "generate COINS with COINS". In just a few weeks, there have been 46,000 nodes in the Livepeer network, and its popularity and participation far exceed that of all blockchain projects and DAPP in the same period. It has occupied the top position in the trend list of BlockBeats DAPP for several consecutive weeks.

What attracts investors to pay attention to the return of PoS node?

It's super high yield.According to Stakingreward, Livepeer has the highest rate of return of any PoS project, at 155% per year.

When the price remains the same, the new issuance of tokens means the depreciation of tokens, so why are people still jumping in and even willing to mortgage the COINS? Why are these people in the coin coin business?

Before 2018, PoW, represented by bitcoin, was the most mainstream decentralized consensus. Miners were once a very popular profession in the PoW world. They use a miner to dig up COINS and sell them. At the peak of the bitcoin price, the number of miners soared and miners even sold out. This is the Proof of Work consensus play, in this economic incentive system, just look at the workload. The faster you do the math, the more rewards you get.

In the middle of 2018, the DPoS consensus represented by EOS attracted a lot of attention in the currency circle. In June, the launch of the main network of EOS with a financing of us $4 billion boosted the enthusiasm of the whole currency circle. The network's capabilities, which surpass those of bitcoin and ethereum, have made the DPoS consensus a favorite, but in 2019, Proof of Stake became the hottest consensus in the industry, and "partnership" became a new trend within the circle.

BlockBeats will explain this business to you from the aspects of PoS miners, the difference between PoS and DPoS, and the revenue of PoS nodes.

"Miner" and "pit" in PoS

In the PoW, miners maintain the network and verify transactions on the network, so they are entitled to financial rewards, such as bitcoin. In the PoS network, there is the same role of maintaining the network, but slightly different. The so-called maintenance network operation is worthy of packaging the block chain transaction data in the node for confirmation. PoW adopts the mode of competition, while PoS adopts the mode of node relay.

First of all,PoW and PoS COINS come from different sources, bitcoin is dug out bit by bit, that is to say, community users first become miners, currency, will generate liquidity. In PoS, through a variety of coin issuing and financing channels, the user gets the Token in advance, and then complies with the system regulations to have the chance to become a "miner" in PoS.

Token alone doesn't make a miner. In PoS, users need to take a staking (" pledge "or" pledge "). This action means that users can pledge their Token into the system, and only by mortgaging a certain number of tokens can they become "miners". In a PoS network, also called a node.

Nodes have different names in different PoS networks, such as the roaster in the Tezos network and the verifier in the Polkadot network. However, their responsibilities are similar. They are both responsible for building blocks and maintaining networks.

In the PoW network, some miners will gather the calculation forces together, thus forming a calculation force more than they can achieve, called the pool. The higher the proportion of computing power, the higher the chances of digging up bitcoin. The COINS are distributed in proportion to the force of the miners in the mine. In PoS, there are also such "mines".

In PoS, some cash is not to become a node of the mortgage amount threshold, such as in Tezos, become roasters need at least 10000 COINS, but if you only have 5000 COINS are also want to be a node, only to put the money entrusted to a man who is already a node, such two COINS mortgage in together, do together node, at that time, this node will become the "pool" in the PoS.

The difference between PoS and DPoS

Actually DPoS Delegated (PoS) and the difference between the PoS is not particularly big, can be based on the threshold of the node, etc.

EOS is the representative of the block chain of DPoS consensus mechanism, so many people think the rules of EOS are the manifestation of DPoS. In the EOS network, for example, nodes cannot distribute rewards to voters and are punished if they are found to be doing so.In fact, this is a special rule of EOS, not all DPoS.

The main difference, in fact, is the threshold to become a node: the focus of a DPoS is the election, the holder of the currency to vote for the candidate, and the top ranked can become a node. For example, in a class of 50 students, there are 5 class cadres and a total of 10 candidates. You never know at least how many votes you need to get in order to be elected. Thus, the node threshold of the DPoS is raised to a fairly high position, and the supernode is thus formed.

When EOS selected the supernode, there were nearly 200 candidate teams, but in the end only the top 21 vote-getters were eligible for the block. So for nearly three months, all the teams were canvassing. EOS's 21st node currently has 94 million votes, or 1.5% of the total.

However, the general PoS network is not an election system. As long as a certain amount of tokens are pledged, it can become a node. Still that class chooses class cadre just now, now the rule changes as long as you have 3 votes you are a cadre. This makes the threshold very low, much lower than the threshold of a DPoS node.

To bring about the craze of Tezos, for example, in block Tezos chain network, the node called "bakers", become the standard of bakers is mortgage at least 10000 XTZ. That is to say, as long as you have 10000 dollars, can also become a node. Tezos now has more than 400 nodes in a network. And the representative of the DPoS EOS block chain, want to be a real power of the block node, the need to cut 1.5% of the vote tokens to get elected, and the number is constantly improve in the competition.

In contrast, the advantages of PoS are much higher than those of DPoS.

Node revenue of PoS

Just as the COINS dug in the PoW are the miners' rewards, the PoS block chain will have a certain amount of additional issuance or official foundation release every year, and these issuance or release will be the source of rewards for the nodes. Although EOS is the consensus of DPoS, node revenue is the same as pure PoS network, which is also provided by network add-on.

EOS started out with a 5% annual issue, which was 50 million EOS a year to reward nodes. At that time, the price of EOS Token soared to 140 yuan. According to that price, the node with good profit might have 100 million yuan a year.

Cosmos, which went online on March 14, is a cross-chain focused star project. Unlike general PoS projects, which have a fixed add-on rate, Cosmos's add-on rate is adjusted at any time. According to the white paper, if more than 2/3Atom is involved in Staking, the minimum issuance rate is 7%, and if less than 2/3Atom is involved in Staking, the maximum issuance rate is 20%. Currently Cosmos's mortgage rate is over 50% and its provisional annualized yield is 12%.

Learn about the Cosmos project. Read "written on the eve of the launch of the cross-chain project Cosmos"

BlockBeats has sorted out the information of the current mainstream PoS projects, and the highest one is IOST. The annual return rate of the node is about 16.74% without the contribution reward. However, the Loom without additional growth relies on the official 300 million tokens to reward the verifier, and the remaining 20% is issued every year, just like Cardano.

Calculation time: early April 2019

In addition to the above five PoS projects, there are dozens of PoS block chain projects that can also be used as nodes to earn profits. There are also many star projects that will be launched soon, such as Cardano, Polkadot and so on.

This business seems to be a sure bet, but it has also spawned a number of teams specializing in node operation and consultancy services, and a number of wallets offering PoS block chain mortgage services. For example, BlockBeats interviewed a number of teams engaged in PoS node services, some of which provided management solutions for PoS public chain, and some provided mortgage income services.

Find out how much money the PoS node team can make, and recommend reading [let the node team tell us, how much money can we make doing PoS node?]

Is the business of PoS mortgage currency really a steady profit? Of course not. In a bear market or a sideways market, holders are willing to pledge their money to the system in exchange for a steady return.

But what if the currency keeps going up?

Recently, the market has improved obviously. Mainstream currencies are soaring. Some currencies have risen more in a single day than the Internet's annual yield. When too few COINS are pledged in the system and the nodes cannot run normally, it may affect the normal operation of the block chain.

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