CrowdNode started the year 2019 on a big wave. Having launched our service on mainnet less than 4 months earlier, we already had 14 masternodes and 172 members with a balance on our platform.
This fast, initial growth however, slowed down considerably during 2019 and we came out of 2019 with 29 masternodes and just 287 members with a non-zero balance. In fact, in Q4 of 2019, we didn’t add a single new masternode. The bear market, which saw the DASH price drop to below $40 in December – after having rebounded to $175 in June didn’t help.
Active masternodes by year-end
On the other hand, we look back upon 2019 with a sense of great pride and excitement. As one of the major highlights in March 2019 we introduced member voting. With this feature, all CrowdNode members could leverage the CrowdNode masternodes to vote on all active DASH governance proposals – even members with as little as 1.0 DASH could now vote and get their proportional say in the future of DASH – or in fact *more* than their proportional say due the amplification that is based on proportional delegation of unused votes from other members – we call that “the amplification factor”.
The upgrade of DASH to 0.13 (DIP3) also enabled delegation of masternode votes, which (among other things) enabled us to offer to add privately held masternode voting-keys to the CrowdNode voting pool. This enables an otherwise “passive” masternode owner to delegate their governance votes to “the crowd”.
We are not aware of any other services offering similar solutions and our voting system with voting amplification is, to the best of our knowledge, unique to CrowdNode.
Speaking of other services, quite a few services have emerged during 2019 offering some form of rewards for storing client DASH, but as mentioned – none so far seem to take DASH governance seriously. Also, it is hard to know how successful these new entrants are at attracting deposits, since transparency is generally hard to come by.
At CrowdNode we are proud of our transparency. Although it takes a lot of work, we publish monthly reports with details of in- and out-flows of DASH, membership numbers, even problems and incidents such as server crashes are reported publicly. We strongly believe that every actor in the DASH ecosystem (and certainly anyone taking treasury funding) should be highly transparent in what is going on and where funding is allocated, but with the DIF and DCG as notable exceptions, many DASH entities choose to have their books closed.
The overall development of the Dash price hurt us slightly, as all our costs are in EUR.
Honoring our pledge of transparency and on a related topic, 2019 was NOT a profitable year to offer pooled masternodes. Besides the 1000s of unpaid hours we’ve invested at CrowdNode, our total DASH turnover in 2019 could not pay our external costs (fiat), so we’ve been investing fiat into CrowdNode throughout 2019. A significant part of our infrastructure and hosting costs relate to functionalities related securing our hot-wallet, for which compromise is not an option.
When we started to developing the service two years ago, we had our hopes that CrowdNode would be a sustainable business, that would be able to pay off salaries and prosper further development within a shorter period.In hindsight, we still strongly believe in DASH and that our business model will become profitable soon enough as DASH regains a reasonable market price (we’ve been hodling). Doing the math, it seems that many similar services also cannot possibly be “living on masternode rewards” at current prices so their real business model must be something else which we cannot speculate on..
Another very particular highlight of 2019 for the CrowdNode team was the DASH convention Europe and the following trip to Munich and the Octoberfest (DASHtoberfest). We got to hear great talks at the convention and we gave a talk about DASH governance – but more importantly, we met so many awesome people face to face. All in all, it was a GREAT trip; and it was good for business too – we saw a meaningful uptick in net deposits following the event.
Pulling out the old palantír to see what is ahead, a few things stand out clearly. First of all, we are super excited that that Evolution/DASH Platform is finally out on for testing, since the DASH Usernames feature solve one main problem for our members – namely our slightly cumbersome procedure for depositing on the CrowdNode platform, so stay tuned for that!
On the development side of things, it’s not just improvements to the DASH protocol that’s coming up. Without spoiling the surprise, we plan to introduce a via-the-blockchain API for using the CrowdNode platform which will enable some pretty exciting things – such as using CrowdNode without ever visiting our website or other GUI.
Another thing we see brewing on the horizon is the possible adjustment of the DASH issuance mechanism. As Ryan Taylor spoke of at the “Improving DASH As A Store Of Value” talk at the DASH Evolution Open House in December, new models are being discussed where DASH is not only minted to miners, masternodes, and the treasury, but perhaps also to stakers (with no need to hold 1000 DASH). If such as system is implemented it will probably have an impact on our business model, but it is anyone’s guess how severe it might be. In any case, we are supportive of any initiative which helps and promotes DASH – even if it is against the narrow interest of CrowdNode (although all things even, we’d like to keep our crowd-pooling service for masternodes running, because we think our system is pretty neat 😊).
All in all, we are super excited for CrowdNode – and for DASH’ future. Despite the recent 200% run up in the price of DASH, our digital cash project still feels to us like a highly compressed spring, ready to burst out in full length and we are super excited for 2020 and beyond.
Hopefully Dash will continue the positive trend that has brought Dash back towards the larger cryptocurrencies.