Earning money on Minter

Earning money on Minter

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Aside from the advantages Minter offers, you can also make some respectable income here. Below, we’ll talk about the ways you can make money on Minter.

Delegation

Delegation is the transferring of coins to a validator. The coins are still yours, they’re just crossed out from your wallet address.

Delegation is a way to support a validator directly, along with everything it does on Minter. The DPoS consensus is referred to as a democracy technology, since delegates, regular users, are responsible for a lot of decisions within the network by voting with their coins, their money. If a validator’s actions don’t satisfy the delegates, if their mindsets don’t match, if a validator makes decisions that make the network stagnate, delegates can just unbond their stakes and the validator may be removed from the active validators list, stopping its life within the blockchain.

All this delegate activity is rewarded.

The validator profits, 10% of this profit goes to DAO (decentralized organization), 10% goes to the developers, the validator leaves some money for themselves as a customizable fee, let’s say that’s another 10%. The remaining 70% are distributed amongst delegates proportionally to their stakes (investments).

At the moment of writing (March 2021) the profitability of delegation is about 50% annually.

Example

BTC.Secure validator makes a profit of 50 000 BIP daily and has a 10% fee. In the validator there are 10 stakes, 325 000 BIP total:

  • Ian delegated 100 000 BIP (~30.76% of the total stake)
  • Jack delegated 75 000 BIP (~23.08%)
  • Chris delegated 50 000 BIP (~15.38%)
  • Brian delegated 30 000 BIP (~9.23%)
  • Vincent delegated 20 000 BIP (~6.15%)
  • John, Matt, Jason, Michael and Edmund each delegated 10 000 BIP (~3.08% each)

With a daily income of 50 000 BIP, 5 000 BIP (10%) is sent to DAO, another 5 000 BIP (10%) is sent to the dev team, 5 000 BIP (10%) is sent to the validator, and the remaining 35 000 BIP (70%) are distributed amongst delegates proportionally to their stakes, it’s all automated:

  • Ian gets 35 000 BIP * 30.76% = 10 766 BIP
  • Jack gets 35 000 BIP * 23.08% = 8 078 BIP
  • Chris gets 5 383 BIP
  • Brian gets 3 230.5 BIP
  • Vincent gets 2 152.5 BIP
  • John, Matt, Jason, Michael and Edmund get 1 078 BIP each

Validation

You can not delegate, but you can also launch your very own masternode and start validating on Minter yourself. All the functionality in the network is carried by validators, it’s a very responsible role, therefore it requires a lot of skill and knowledge. If a validator signs transactions and generates blocks with false data, it receives severe penalties to the amount of coins it has generated in total, and in a case of double signing, it also gets a full unbond (reverse delegation) of all its coins, which become available again in 30 days.

To maximize masternode productivity and minimize the penalties, you’ll need to use high-level computing, be able to set up and update the OS, provide security and stability for the servers. If a network update is coming up, all the new changes must be tested for functionality before accepting the update (updates are only implemented if more than 2/3 of active validators accept it), for these tasks you have the testnet. Being able to understand the update code to have more confidence in its security and stability is also an advantage.

But that’s not all. To get on the list of active validators, you need to have an initial stake, since the amount of validators is limited and they’re determined by the size of their delegated stakes. To gather the required stake you either need to delegate BIP to the node yourself or convince the network that you are a competent, reliable and safe validator, and that you have plans to improve the network. That way you can acquire the initial support you need to begin validating. Otherwise you’d be wasting monetary and time resources.

Like we said before, the validator customizes the fee they’ll be getting from the total rewards. It can be anywhere from 1% to 100%. 10% automatically goes to DAO, 10% goes to the dev team, and the remaining 80% are up to you: you can have a 10% fee, so that 70% can be shared amongst your delegates, or you can set a 100% fee, then the delegates won’t get anything (but that wouldn’t be a smart thing to do, would it?)

Validators get the opportunity to change their validation fee every 3 months.

Trading

Traders’ income comes from buying cheap and selling high. But these people are very important for the network, as traders specifically give liquidity to coins and assets.

You can start trading here:

Liquidity providing

Providing liquidity to a pool is another way to make money. On Minter, for trades (also called swaps), a 0.2% fee is taken and then distributed amongst the liquidity providers proportional to their share.

The list of existing liquidity pools as well as approximate yearly profitability percentages (APY) can be seen at Minter Explorer and Chainik.

Don’t forget about the concept of Impermanent Loss.

More information about liquidity pools in DeFi can be found on a separate page, and more about liquidity pools specifically within Minter can be found here.

Farming

Farming means encouraging users to provide liquidity for a pool. Liquidity providers get an additional percentage for the liquidity. Terms, percentage, as well as the token in which the farming rewards will be distributed will be decided by the initiator or sponsor. Usually the project creators are the initiators and sponsors, whose token is traded in a pair.

Find out more about functional farming strategies on Minter here.

Farming is not only an additional motivation for providers, but also a way to lower potential impermanent losses, which are unavoidable in pools with volatile enough tokens. More about this concept here.

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