ESC Masternodes explained

ESC blockchain has the unique two-tier architecture that allows achieving very high performance and much better security with multi-factor authentication (2FA).

Each user account is assigned to a single masternode. The task of a masternode is to provide the user with the possibility of making very fast and very secured transactions and also give information about the state of the blockchain. Each masternode has one operator account assigned to it. In exchange for its services, masternode operator account receives a small fee for each transaction.

Users can connect to their account and master node using command line client. We are in process of designing web application to improve accesibility and user experience of ESC users and masternode operators.

Having an account in the chosen masternode is also a vote of confidence for its operator. 31 masternodes with the largest amount of deposits are responsible for validating blocks. Only the collusion of more than half of them can lead to irregularities in network operation. Meaning that another very important role of masternodes is to provide consensus regarding blockchain state.

Conversion process

ADST conversion to ADS will begin with the creation of genesis block. In the genesis block, 38758206 ADS will be created, and according to ESC blockchain specification, this amount cannot be increased without carrying out a hard fork. Half of the coins will be spent on conversions from ADST in the ratio of 1 ADST = 1 ADS and the other half will be allocated according to other criteria as explained in the whitepaper.

There are two ways to convert ADST to ADS.

The first way is to convert into genesis block. To do it you will have to destroy (burn) at least 20,000 ADST before the blockchain start. Instructions on how to register into genesis block will be provided

in a few days. People who decide to do so will have the possibility to become masternode operators in the ESC network without having to pay a standard fee of 5,000 ADS. We also expect that genesis group will actively participate in the network startup and will run the masternode software on their own servers.

The second method is to convert after our ESC blockchain release and having ESC network already running. This method does not have the minimum required and all the funds go to the standard user account without creating a masternode. Instructions for this conversion will be given after the release of the ESC blockchain.

Fees

We have just confirmed final fees on our ESC wiki. The most interesting are:

5,000 ADS for new masternode creation

Transactions:

0.05% for a transaction within a node

0.1% for a transaction between nodes

More details available here: https://github.com/adshares/esc/wiki#fees

Dividend

The fees charged by the network are added to dividend fund. However, each masternode involved in the transaction has an operating fee and its operator account receives 1/16 of the transaction fee and the remaining part of the collected fee goes to the dividend fund.

Every 2048 blocks (~ 2 weeks) the dividend fund is distributed proportionally between all accounts with a positive ADS balance, regardless of whether the account is active or not. For example, if there are 100,000 ADS in a dividend fund, a person with 387582 ADS (1% of the total) will receive 1000 ADS of the dividend, while a person with 3875 ADS will receive 10 ADS of the dividend.