Decentralized is a word that’s used in the marketing material of almost every cryptocurrency today – yet a lot of these coins are in no way, shape or form decentralized.
If we look at coins that offer masternode sales during their early life in particular, the premine and reward structure is set up in a manner that the developers are able to set up a large number of masternodes on day 1. The masternode rewards are then set at the extremely high level required to attract these masternode investors in the first place. A review of the split between masternode rewards and those of miners or stakers quickly reveals that 90%+ of the coins are under the control of the developers and masternode buyers – and remain so until these groups dump their coins on the exchange. We ask you – is such a setup truly decentralized?
DRIP is operating differently. We had a 290,000 premine – with 250,000 of these coins being allocated to miners, and miners alone. We do not sell coins or masternodes. The miners are mining LUX and RVN, two ASIC-resistant coins that are unavailable on Nicehash, and being rewarded with DRIP coin. The LUX and RVN is being used to fund our exchange listings.
The DRIP model ensures that any miner, large or small, can secure a good allocation of DRIP coins and keeps the rich investors with their endless supply of Bitcoin at bay. Our goal during month 1 is to have a fair distribution of coins among 100’s of miners – not an allocation of 90% of supply to masternode investors.
Our 40,000 allocation from the premine is used to set up four masternodes, the rewards for which are only 10% of block rewards during the first month. After the first month, our see-saw algorithm kicks in. The see-saw algorithm attempts to have the block reward approximately halved between masternode and staker – with a slight skew towards masternode rewards to cover the costs of running a masternode (about $10 per month).
DRIP is a proof-of-stake cryptocurrency and uses masternodes to assist in offering very specific functions.
The masternodes enable the privacy aspect of DRIP as well as the monthly voting system that allows masternode owners to analyze proposals put forward by the DRIP community and vote on which are moved forward with.
The stakers own DRIP coins and have a wallet connected to the internet and enabled for staking. For each block, a random staker is chosen from the network and that staker is responsible for creating the new block and processing the transactions within it. A stakers chance of being chosen increases dependent upon the number of coins they hold – but even 1 coin can be staked.
As with most other currencies, DRIP offers DRIP coins at every block to each of these two groups as a reward for performing the duties assigned to them.
However, there is a third group of people that are needed if a cryptocurrency is ever to gain widespread adoption – those that accept DRIP as payment for their goods and services. There are hundreds of coins today that a retailer can choose when deciding on whether to accept crypto as payment – DRIP’s goal is to be the coin of choice. We are doing this by offering ‘Retailer Rewards’.
In short, a retailer reward is a third reward tied to each block of transactions processed on the DRIP network. This reward will go to the last person to whom the randomly selecting stake-reward winner had sent DRIP payment to.
Imagine the developer of Candy Crush, or some other mobile app, as a retailer scouring the market in an effort to find their cryptocurrency of choice for payments. With DRIP, consumers would pay them in full for their goods or services – but they would also be eligible for potential retailer rewards in the future.