Full nodes are servers running on a P2P network that allow peers to use them to receive updates about the events on the network. These nodes utilize significant amounts of traffic and other resources that incur a substantial cost. As a result, a steady decrease in the amount of these nodes has been observed for some time on the Bitcoin network and as a result, block propagation times have been upwards of 40 seconds. Many solutions have been proposed such as a new reward scheme by Microsoft Research and the Bitnodes incentive program.
Figure 1: Bitcoin Full nodes in the spring of 2014

These nodes are very important to the health of the network.
They provide clients with the ability to synchronize and facilitate quick propagation of messages throughout the network. We propose adding a secondary network, known as the LiteGenX masternode network. These nodes will have high availability and provide a required level of service to the network in order to take part in the Masternode Reward Program.

LiteGenX Masternode Reward Program - Cost and Payments


Much of the reason for the decrease of full nodes on the Bitcoin network is the lack of incentive to run one. Over time, the cost of running a full node increases as the network gets used more, creating more bandwidth and costing the operator more money. As the cost rises, operators consolidate their services to be cheaper to run, or run a light client which does not help the network at all.
Masternodes are full nodes, just like in the Bitcoin network, except they must provide a level of service to the network and have a bond of collateral to participate. The collateral is never forfeit and is safe while the masternode is operating. This permits masternode operators to provide a service to the network, earn payment for their services and reduce the volatility of the currency.
To run a masternode, the operator must demonstrate control over 5,000 LGX. When active, masternodes provide services to clients on the network, and in return receive regular payment from the block reward. Like miners, masternodes are paid from the block reward, 35% Ascending up to 65% of which is dedicated to this program.
Due to the fact that the masternode rewards program is a fixed percentage and the masternode network nodes are fluctuating, expected masternode rewards will vary according to the current total count of active masternodes.
Payments for a standard day for running a masternode can be calculated by using the following formula:

(n/t) * r*b*a

Where: n is the number of masternodes an operator controls t is the total number of masternodes r is the current block reward b is blocks in an average day.

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