[et_pb_section bb_built=”1″ _builder_version=”3.0.63″][et_pb_row _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.0.63″ background_layout=”light” text_orientation=”left” border_style=”solid”]
Check out https://mass.cloud/ for more details
Before you invest in any crypto projects, read the whitepaper and see if it speaks to you. Think of it as a rite of passage. The MASS whitepaper is a relatively quick read and does a pretty good job of laying out the market and approach. Basically there are problems with Proof of Work (PoW) as a consensus algorithm — namely that it, by design, chews up energy and that’s not great for the environment. Proof of Stake (PoS) is becoming more popular and MASS is offering a service to make it easier for the average crypto investor to take advantage of some of the unique benefits it makes available.
I admittedly don’t have a masters level grasp of PoS, so if I get anything wrong, let me know and I will correct it. This is very high level. Mr. Cooper wasn’t able to get a straight answer so I guess it’s up to me to lay it out.
Proof of Stake
To break it down in a very basic manner — Nodes on the network in charge of validating and processing transactions do so by “staking” tokens they hold. Like in PoW, the node that processes the transactions is rewarded with some tokens, the difference though is that the winning node is chosen pseudo-randomly based on the amount of tokens they have staked proportional to the network. If it is determined that the node not acting honestly (really meaning “in a manner that is in the best interest of the network”), then the tokens they staked may be burned. Staking is basically giving control of your tokens to the network, and the downside is much larger than the upside so actors are incentivized to be honest over the long term.
Delegated Proof of Stake
In DPoS Delegates are chosen or buy in with larger token balances to handle consensus. This generally means less nodes actively participating, but they have more at stake. Think representative democracy vs pure democracy (except for maybe the “more at stake” piece). Along with ensuring consensus, PoS systems can also have governance built into the system, where the nodes vote on changes to the protocol or projects/initiatives the network should fund.
What is MASS trying to solve?
There are notable hurdles to participating in and benefiting from PoS networks:
- Generally, the network requires a minimum amount of coins to effectively stake.
- Staking can be cumbersome to setup and maintain
me, configuring a staking node
This makes it very difficult for the average user to participate in the benefits of staking, namely:
- Earning tokens for maintaining the network (can be thought of as interest on staked tokens)
- Ability to run a masternode which unlocks added benefits such as the ability to vote on proposals for changes to the network or projects the network may fund.
You can think of it as a traditional bank deposit or note. You agree to lock up some of your capital, the bank uses that capital to fund its operations and grow, you receive some benefit (interest) for allowing the use of your capital. The more funds you make available to the bank the better rate you get (rich get richer) and the more pull you have. MASS is providing a way for individuals with smaller balances to still reap some of the rewards from staking by pooling their tokens together.
To participate you need MASS tokens. Once you have them you choose how many you would like to stake and to which coins you would like them staked. How this is handled is still to be worked out exactly and will likely be dependent on the level of funds they are able to raise. It may start out with set “portfolios” with percentages in a group of pre-chosen coins, then move to more user/community controlled groupings or a-la-carte options. The staked MASS tokens will represent an amount of ETH of the underlying tokens (if there is $50m of ETH in the investment pool and 50m MASS tokens then each token represents $1 worth of ETH). That amount of ETH is then used to purchase and stake the underlying tokens. There will eventually be different ways to receive returns, but initially you will have a choice to reinvest tokens earned through staking or get a payout in the appropriate amount of ETH. For smaller accounts payouts will be small, so there may be withdrawal limits since very small amounts won’t make sense when network fees are taken into account.
Gratuitous steak break — 67 oz. ribeye @ St. Anselm in Brooklyn. Best in the city!
Throughout the whitepaper there is a theme of trying to move to as much of an automated/hands off system as possible. The focus initially will be to keep it simple and focused, which will involve more decisions made by the MASS team, fewer features, and less flexibility. It is clear though from the time I spent in the Telegram chat the past couple days that the team does not have any interest in any heavy-handed control of the project. They would rather open it up to the community.
- The project creates a pool of capital that may become a target for hacking.
- ETH value outpaces the growth of tokens chosen by the pool.
- PoS doesn’t catch on and ETH and PoS tokens end up lagging.
- Not enough funds are raised and they can’t hit critical levels of staking.
I see 1 as pretty much a risk of every crypto project. They are using smart contracts on Ethereum, so the security of the Ethereum network will be in play. Also, I trust they will be more secure than how I personally secure my wallets. I know they are planning a stronger marketing campaign soon, so hopefully 4 won’t be an issue. For 2 I am looking at MASS as an easier way to get exposure to smaller market cap coins. I own many of the tokens that should be available and once I get a feel for the platform I will likely close out my positions of direct ownership and gain exposure through MASS. The ability to withdraw the underlying tokens is on the roadmap as well, so those that are only looking for direct exposure should be able to participate. Owning them through MASS has the same potential opportunity costs with owning any asset versus another, but I will at least get the staking benefits I would miss out on from having the shares sit on an exchange or wallet. Additionally, it will allow for an easy method of diversification — one input/output instead of managing multiple assets on an exchange. Underlying this is the current plan for Ethereum to move to Proof of Stake at some point in 2018. There are a lot of other components of the various tokens to take into account, but when it comes to any concerns about the viability of PoS, Ethereum successfully making the move will be huge in building confidence in the approach. There are also a number of existing projects leveraging a flavor of PoS (Bitshares, DASH, Stratis, EOS, Lisk) with billions of dollars in market cap.
From the whitepaper:
During presale and the ICO, purchases can receive extra tokens up to a certain limi . We are setting a cap of 10 million tokens to be sold during the presale. During this time, all purchases will be given 30% more tokens. Once the ICO starts, the bonus structure will change to the following: Phase 1 of the ICO will offer 20% more tokens on purchases on the first 5 million tokens. This is outside of the tokens sold during the presale. Phase 2 of the ICO will offer 10% more tokens on purchases on the next 10 million tokens. Phase 3 of the ICO will offer no bonus tokens and a flat exchange rate of 1000 tokens per Ethereum is set. Max tokens created will be 61 million.
What I like about MASS
The selling points are easy to understand even for the non-crypto enthusiast. The project has low overhead and at its core it is just offering a service that makes something difficult much easier. There is a long history of that being an effective model. You could argue that they may not need a native token, but I do think it makes things easier to roll out and likely easier to implement new features in the future. There are still plenty of tokens available in the presale — the presale has no minimum and a 30% token bonus (1300 per ETH). It is less of a traditional presale and more of a way to build up a smaller initial community that is invested in the project to help with growth in the future. The presale has a couple days (the end is based on a specific Ethereum block so it depends on the speed of the network) and ~38% of the allocated presale tokens left. Give it a look and see if you want to join me in cultivating some MASS!
Disclosure/disclaimer: This is not investment advice. Do your own research. Only invest what you are comfortable losing. I have participated in the MASS presale.