SINOVATE, a deflationary model for masternodes
After the bullish trend of 2017 followed by the major crash in 2018, cryptocurrencies have remained for a very long time in the shadows, until now. Most current cryptocurrencies are inflationary in relation to the amount of existing and available supply (excluding stable currencies).
The number of coins steadily increases day by day without really providing a solution to a major problem or without bringing a utility that will serve for everyday users. Today, out of the 2,000 existing currencies, only a few hundred manage to meet a real need by bringing diverse and varied uses to accelerate the general adoption. When we add to all this the decline in demand for certain currencies, it is very difficult for a project to be able to stay afloat and to propose innovative solutions for the long term.
Inflation is present regardless of the economic model chosen, POW, POS or even with a network of masternodes. The SINOVATE project proposing a cryptocurrency based on a consensus POW / MN and the X25X algorithm is also affected and sees its number of coins increase as one goes along. The SINOVATE team has been able to identify and prevent the disadvantages of masternodes to develop a sustainable solution while ensuring an appreciation of the value of the SIN currency over the long term.
Problems related to masternodes
For reminder, a masternode is a node connected to a network from which transactions are made, but also for the purpose of creating /receiving/transmitting information through a communication channel via software connected to the network all the time. In return, users setting up masternodes receive dividends in the form of cryptocurrency on a periodic basis. Masternode hosting is a preferred choice of passive income for a vast majority of investors and users.
The daily emission of many new coins on the network has very often resulted in a significant crash of the price over the long term because of those who wish to recover their initial investments. It is rare that a project around these masternodes has managed to maintain a value identical to the day it was introduced on an exchange.
In the case of currency both POW and MN, the risks are even greater. On the one hand the cost of energy needed to mine new coins can be important because although the POW is historically one of the first solutions, it is also very resource-intensive. With a block time of 2 minutes or 720 blocks a day, miners may consider selling very quickly with the coins they mined during the first phase. On the other hand, the principle of masternodes and daily rewards generate, depending on the case and the percentage of daily return on investment, a quick sale to recover the initial investment. One can, therefore, wonder what solution is possible to overcome this problem.
SINOVATE Infinity Nodes and Proof of Burn
The SINOVATE team is responding to the community’s demand by offering tiered Infinity Nodes. This passive income solution is open to all types of investor whatever the size of its portfolio or its financial possibilities.
The different possibilities are divided into three categories:
- Little SIN NODE which requires 100,000 SIN with a reward of 160 SIN and no bonus (12 % ROI)
- Mid SIN NODE requires 500,000 SIN with a reward of 838 SIN and 4,75% bonus (17% ROI)
-Big SIN NODE requires 1,000,000 SIN with a reward of 1752 SIN and 9.50% bonus (22% ROI)
The SINOVATE project has implemented the Proof of Burn (POB) mechanism to solve the inflation problem in the long-term and increase the security of the network through block validations.
When users set up a new masternode, the coins used for the collateral (depending on the type of node) is burnt and that’s why SIN coins must be sent to a non-spendable address. Infinity Nodes have an effective operational lifespan of 12 months and must remain entirely active for this duration to increase network performances and sustainability. More masternodes increase the global strength of the entire ecosystem.
The SINOVATE team has solved a huge concern when it comes to masternodes and market sustainability. Despite ups and downs linked to the constant volatility of the market, the solution proposed by the SIN team is innovative and ensures a certain economic and financial stability for the project and the investors in the long term. Instead of seeing their portfolios devalue as with most masternode projects, Infinity Nodes owners can enjoy having a “stable currency” for this type of business model, or even one that is gaining value over time. They can benefit from their initial investment and further increase their holding at the same time. The proof-of-burn mechanism offers a deflationary solution for an inflationary asset.