Masternodes are a great way to provide you with a passive income which can be extremely lucrative if you research them properly.
Many investors are now looking at these as an alternative to help manage some of the market volatility.
But masternodes come with many questions, where to research, how to invest, which is the best, ROI and more.
In this article, we will start at the beginning and work our way through.
Where To Look For Masternodes:
At this moment in time, I currently use five different sites when starting to research a masternode.
All of these sites are similar in that they show you the following information for each masternode.
- Expected Income – Daily, Weekly, Monthly, and Yearly (These are all estimates)
- Total Coin supply.
- Current Price and History.
- Return On Investment (ROI)
They also have links to each project including the usual like social profiles, github, telegram etc
Below is an example taken from masternodes.online.
At first glance, your eyes are immediately drawn to the larger ROI.
Take Sharingmarketcoin for example, currently offering a whopping 5,206.87% ROI on investment.
Based on the expected numbers alone you could expect to get back your original investment in 7 days.
Now, before you run off, purchase this and start living the high life lets look at masternodes a little closer and exactly what you should always double check.
You wouldn’t want to purchase a masternode and find out a few days later you are now holding a worthless bag of coins.
Masternodes – Legitimacy of a token and product.
I am just going to tell you this straight.
The majority of masternodes available are either going to fail or are just out and out scams.
Many projects have appeared offering a ridiculous return on investment only for them to disappear in a cloud of smoke along with your money.
There are also some brilliant masternodes available, with excellent projects and teams. It is just a case of finding them.
Below we will run through some of the questions you should be asking and looking for when purchasing a masternode.
The best advice I can give you about masternodes is this – Never purchase a masternode based solely on the expected return on investment.
1 – Liquidity and volume of the coin/token.
What is it?
There is no point in purchasing a masternode if the daily volume and liquidity on the exchange (or hopefully exchanges) is very low.
Whilst it is great earning tokens every day, if there is no volume how would you then turn a profit?
Don’t get into any project that you cant be rewarded from.
My recommendation on this is looking for a masternode with a 24-hour volume around the $60k – $100k and check to make sure it has been at these numbers consistently for at least 4 or 5 days.
2 – Is there a use for it? Utility?
You need to know what use cases the token has and then evaluate the importance of it.
Is it relevant right now? Will there be a need for it in 6 months, a year from now?
Will it even be used?
Are they other tokens in the marketplace, if so check them out and see what they are doing.
Having competition in the marketplace is good and a great way to look at similar projects and how they are performing.
3 – Roadmap.
How does the future look?
What does the project have planned and coming up?
Normally the first few things you will see are listings on coin market cap, exchanges, and updates.
Do they plan to get listed on more exchanges?
Is there a clear and concise roadmap in place with future plans for development and growth for both the project and token / coin.
4 – The Team.
The first place to check is the website, any project without a team page or about us is a red flag for me.
I would also expect any project to have a Telegram or Discord group.
In these groups, you get access to the team and admins, this is where they provide updates, assistance with setting up the masternode and other questions you may have.
Ideally, you want a project where the team is involved with the community and fully transparent.
5 – Speak to masternode owners.
Join the different social channels available.
In there you can speak to other owners and get their feedback.
- Is this masternode easy to set up?
- Have you received your reward tokens consistently?
- What are the team like?
- Are any issues with the wallet or masternodes quickly resolved?
- Has there been any issues?
You will find most people in these groups are open and honest about their experiences.
6 – Block Rewards.
Will the masternode still have the potential to be profitable in the future?
What does the block rewards structure look like over time?
If the block height increases and masternodes are added to the network every day what does the reward look like then?
No project is the same and all have different block schedules.
Realistically most genuine projects will have a decreasing block reward over time as more masternodes are added to the network.
7 – Coin / Token Supply and holdings.
Coin / token supply is very important when deciding on a masternode.
What is the total supply? Coins with high supplies usually don’t have enough demand in the marketplace to maintain a high price.
Was there a pre-mine? If so, are the team holding a large supply of these pre-mined tokens?
Any team that has tokens should always have them tied into the project for a number of months/years to ensure they can’t just sell the tokens and effectively crash the price.
When researching I aim for a team holding of no more than 4% of the total coins.
You wouldn’t want to invest and then just a few months later the team dump all their tokens and the price crashes.
This has happened many times in the past and will continue for some time yet.
That’s enough for this article – How To Research Masternodes.
Overall masternodes can be an excellent way to start earning yourself a very nice passive income.
Yes, there are risks involved like any investment, but if you use the above as a guideline when researching you are putting yourself in a much stronger position to find some real gems.
The video below covers what we talk about in this article and shows you some more examples.
You can check out more of our masternode articles by clicking on the images below.