When Rewards?
You heard about passive income from staking coins and masternode coins. You set up a wallet. You set up your computer such that it doesn’t go to sleep and no longer gets automatic updates. You bought a nice little bundle of the coin and transferred it from an exchange into the wallet. You unlock your wallet for staking or you get your masternode up and funded…..and…
When rewards??? This article is about rewards in the Divi ecosystem.
Why Divi?
There are a number of coins out there now that allow you to stake the network or run a masternode. However very few of them, if any, make it as easy as Divi does. I am a huge fan of cryptos that let everyone participate in the economy of the coin. While bitcoin technically does this, in order to really compete in that ecosystem you have to invest in some serious equipment and will do far better if your energy is cheap or you are parasitically getting it from somewhere. I am a huge fan of the Dash masternode system, but to buy in to have your own requires huge sums of money, or you have to buy a share of a masternode which puts you into a trust relationship with the masternode owner. Then there are great staking coins out there like Neblio and soon Cardano. But when it comes to a complete ecosystem, with both staking rewards and masternodes, low barrier to entry and ease of use, Divi has everyone beat. Not only because of functionality, but also due to the fact that Divi is trying to make crypto so easy it’s really for everyone.
Divi Masternode Returns
The Divi ecosystem offers two major developments for lowering the barrier to entry. First off, they have a tiered masternode system. This means that you don’t need an insane amount of investment to get your own masternode. They have branded their masternode tiers by metal (sort of…maybe “valuable material” is a better description), so a small investment will grant you a copper masternode, while a large investment will get you a platinum or a diamond. The incentive to get a large masternode is that there is a 5% bonus for each level. This is not a bonus reward (each reward that you receive will be 540 Divi). Each bonus is a 5% additional chance for getting the reward at all.
The other reason Divi masternodes help entry into crypto is their MOCCI (Masternode One Click Cloud Install). Seriously, try setting up a masternode for any other coin and then try a divi masternode. You seriously just press a single button, and BAM! You have a masternode running. That is the way it should be.
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As a quick aside, you might be wondering — since it is so random, what actually determines when you win a reward? The way the Divi Masternode payments are determined using a decentralized, random selection algorithm, based on masternode tier. Once a masternode is active for some amount of time(2.6 * total number of masternodes, in minutes), it is eligible for payments. Once eligible, it takes part in a probabilistic process that determines the winner of the next block. Each masternode tier has a different chance of winning. When a new block is added to the network, every masternode submits a vote for the winner. Each ticket provides an opportunity to create a score, and whoever gets the maximum hash wins the selection process.
Copper — 20 Tickets, Silver — 63 tickets(3 times 20 + 5%), Gold — 220 tickets(10 times 20 + 10%), Platinum — 690 tickets(30 times 20 + 15%) and Diamond — 2,400 tickets(100 times 20 + 20%).
For a more detailed explanation please refer to the wiki https://wiki.diviproject.org/#masternodes
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So? When rewards? Well, unfortunately it’s not as simple as that. There are hundreds of masternodes all competing for transaction verification. The Divi team is prolific in their writing, if you want more information about Divi masternodes, check out their blog or wiki entry. Short version: depends on your masternode level. Now for the longer version.
Telegram user and admin for Divi, @John_not_johnny, put together a bunch of data for me for every masternode level. Let’s look at a histogram of reward times for silver masternodes for now. The horizontal axis marks the time from one masternode reward of 540 divi to the next one. This chart has been normalized to scale to 100, so the exact units of the vertical axis are meaningless, however think about them as “number of rewards”, it’s a histogram, but the mean is not at that peak. However, we can say that for a working silver masternode, 75% of the rewards come in within 17.9 hours and 90% of them come in within 27.4 hours. However, we have seen rewards for a silver node take as long as 58.3 hours! All of these values are expected. So while you should see a reward every day or so with a silver, if you don’t see one for a couple of days, nothing is broken! Welcome to stochastics!
So now we have a good way to delineate reward times for each level of masternode. We can talk about returns in terms of 75% of observed reward times, 90%, and maximum observed reward intervals. But also keep in mind that this graph does not show maximum possible reward interval. I have not looked at every single masternode, at the time of this writing, there are 443 of them! Further, the process is stochastic, it’s always possible that you are extremely unlucky and don’t get a reward for days, weeks or months. So below is a table that describes reward time expectations.
One note: I assumed that each block takes 60 seconds. In Divi, this is not the case, some blocks are shorter and some blocks are longer. The average block time changes as the blockchain gets older. Right now, average block time is about 60.4 seconds. Another note: A wallet that funds a masternode can also receive staking rewards for the balance over and above the required funding amount. While the majority of rewards are masternode rewards, there are also a few staking rewards mixed in.
Divi Staking returns
While Divi has done an excellent job of lowering the barrier to running a masternode, it is also a very good staking coin. Divi is a Proof of Stake coin like Neblio and QTUM are now, and ADA and Ethereum will be. Every PoS coin does it differently, and Divi is no exception. If you are interested in details about staking in the Divi ecosystem, you should catch their blog post on it.
The short version is simple: The more coins you put in your staking wallet, the quicker staking rewards are granted. Simple enough. But how often can you expect rewards for the amount you have? Well, let’s look at a graph for wallets with a lot of Divi in them. I got this data from the published “Richlist”. Now, because stakes come in relatively fast, it’s pretty easy to get a lot of data for wallets with 1 million Divi in it and up. Here is a graph:
There are a lot of things to observe and talk about in this graph. I have plotted here about 100 reward intervals per address. Its nice to see that the range of reward intervals drop as the size of the holdings at the address increases. However, it’s not a perfect relationship. Even the 3 million Divi address had a 12 hour staking interval once! But basically we can see that the average staking interval and the maximum staking interval drops pretty smoothly with holdings at the address. The minimum staking interval for any of these wallets is 1 block, or about a minute.
Now, the richlist made finding the addresses holding the amount I needed pretty easy. And since they stake so fast I was able to get a lot of data. Neither of these things were true for smaller wallets, so we are going to have to be a little more generous about of definition of “average”. Here are what staking reward intervals look like for smaller holdings.
The green bar of staking intervals at the large wallet on the right is the same wallet on the left in the previous graph! Obviously staking intervals expand greatly as the amount held at an address drops. Further, there is not a lot of data available since the blockchain has only been live for a few weeks and addresses that hold 10K Divi seem to average a 456 Divi reward every 100 hours or so. Further, it’s hard to find more addresses without a tool that let’s me find them. So this graph ends up looking a bit blocky, and is undoubtedly innacurate until more data is put in it.
That said, a feel for expectations of staking rewards can be garnered from this graph. But at 10–20K Divi, it can take a full 10 days for a reward and that will be totally normal.
With this data we can create a little table:
Again, the range of reward intervals for addresses with holdings under 1 million Divi grows quite large. So what are the ratios in the two right hand columns?
The holdings ratio is simply the ratio of the holdings in the left hand colum relative to the holdings in the row you are interested in looking at. So if you are interested in the reward times of a wallet with about a million in it, the wallet ration would be the 16 million Divi address divided by the 1 Million-ish divi address. Obviously this number rises as you go down the list. The rewards ratio is the ration of the reward rate of the address with holdings the size you are interested in divided by the reward rate of the largest wallet. The reason I made these columns was to note one fact:
A wallet with 15 times less Divi in it, gets staking rewards only 10 times slower. And this fact gets even larger as you go further down the list. This means that having smaller amounts of divi in more addresses should stake more often, in total, than having it all lumped at one address.
Caveats
All this data comes with caveats, especially the staking data of the addresses that hold smaller amounts. There are a lot of ways that the data can be skewed. I have no idea if the addresses I happened to look at were owned by people who were good about keeping their computers running 24/7 as required for good staking. Or if they were running their computers with good networks, or keeping their CPU and memory relatively free for the Divi wallet. I did make sure that the addresses held Divi for at least a week, because staking rewards are affected by coin age.
This article is not intended to be a scientific disssertation of the rewards of the Divi ecosystem. It’s intended to give you a feel for the reward structure. So there could definitely be more data, and updates going forward.
The ecosystem is constantly changing. People switch from running a masternode to staking and back all the time for various reasons. The number of coins is growing at about a million per day. Average block time is changing. More people are coming into the ecosystem. Improvements are being made to the CLI and Gui wallets. So and and so forth. So these numbers are NOT perfect,but they represent a pretty good description of how it is working right now.
Masternode or Staking?
If I say nothing more, I am sure you will look harder at the charts and graphs above to try to figure out which is the better path for the amount of Divi you hold. So, I’ll just tell you right now. As of the writing of this article, staking is rewarding Divi holders more than their masternode counter parts. But before you go out and drop your masternode, consider a few things:
- If everyone drops their masternode for staking, very quickly, masternodes will be offering better returns. Good luck with your Prisoner’s Dilemma.
- Staking isnt as easy as you may think. You have to make sure your computer is on all the time. You have to make sure your network connection is good all the time. You have to troubleshoot reasons that your wallet isn’t staking despite unlocking it for that. You have to watch out for coin age. If you read the Divi article linked above about staking you will see that there is more to it that just enabling it.
- Masternodes are insanely easy to set up, and they are truly “set it and forget it” because they don’t run on your computer, they run on servers that Divi has set up for you.
So while staking rewards are better, for now, that could change any day and if you want to beat the masternode performance you have to pay far more attention.
Update: 11/26/2018
This article brought up two main rewards strategies, the first is whether staking is better than masternodes, and the second is whether or not staking from multiple addresses is better than having everything at one address. I think we can answer both here:
- It depends
- No, but way more data is needed
As mentioned, I have been keeping track of 12 wallets in the richlist. And I have been comparing them to a single large wallet. The twelve wallets started at about 22M and have increased to 24M. The single wallet started at near 16 million Divi and has worked its way to about 17 million Divi.
So to compare, an assumption needs to be made, that staking scales linearly with balance. This assumption may be wrong, and in fact, the article above explains on how this assumption is, in fact, wrong. However, it shouldnt be too wrong when scaling from 16M to 22M divi as it’s only a small fraction of an order of magnitude.
The staking rewards in both are dropping, and there really isn’t much of a difference between the two besides a few points. So, empirically, breaking up a large amount into different wallets doesn’t seem to pan out as a better staking method.
How about staking versus masternnodes? Does that relationship still make staking look better?
It looks like, with so many Divi holders staking, masternodes have become the more profitable option. For this graph I am comparing the staking results of the 12 wallets and an equal amount in masternodes, which is two diamonds, a platinum and a gold. I didn’t check to see if having 22 golds is better.
This is what has been refered to as the “human see-saw effect”. People will try to improve their benefit from Divi, and by many people doing the same method, that method drops in performance. As more people staked, staking returned less, and masternodes got better.
A quick note on data analysis: I don’t have enough data to be 100% sure of these claims. Is a copper masternode vs a staking a copper’s worth of Divi better? I have no idea. There isn’t enough data. Even the claim about November 20th being the first time running masternodes got better for gold to diamond levels is sketchy as, again, I dont have enough data to claim significance. You have the same data I have. This is simply a reporting of what I have gathered.
The reasons to stake vs running a masternode described above remain true. There are reasons to do one or the other depending on your skills, time, experience, and so forth. The see-saw will continue forever. This was simply the first cross of many.
Good luck to you and your efforts in making Divi the best crypto currency out there.
Special thanks to @John_not_Johnny and @oriz Divi telegram members for helping with some of the data and text for this post.