FLUX masternodes: still profitable? 15% ROI? VPS vs self-hosted comparison

Can a Flux masternode still pay off, and is it better to run it on a rented server or on a small machine at home? In this video (in French), we explain what a masternode is, go through the three node tiers of the Flux network and their returns, then compare the cost of a cloud VPS with that of a self-hosted mini PC. At Happy Mining, we were running our own Flux and Energi masternodes at the time.

Video from 2022: the figures below date from that time. See "What about today?" at the end of the article.

What is a masternode?

A masternode is a server that helps run a blockchain. To launch one, you need two things: a machine that meets minimum requirements (processor, memory, storage) and collateral, i.e. an amount of cryptocurrency locked as a guarantee. In return for the service it provides to the network, the masternode receives a share of the block rewards.

The principle is close to proof of stake, with one difference: simple staking only requires you to lock your coins, whereas a masternode also requires you to keep a machine running around the clock.

The three Flux node tiers

The Flux network uses a hybrid model: half of the rewards go to miners (proof of work), the other half to masternodes. There are three node tiers, depending on the collateral provided. Here are the figures we gave at the time, with monthly rewards counting FLUX and the associated tokens together:

• Cumulus: 1,000 FLUX collateral, about 22.5 FLUX per month, i.e. a return of about 27% over one year;
• Nimbus: 12,500 FLUX collateral, about 171 FLUX per month, i.e. about 16% per year;
• Stratus: 40,000 FLUX collateral, about 469 FLUX per month, i.e. about 13.6% per year.

A Cumulus node needs few resources, which makes it cheap to host. At the time, the network had about 11,645 nodes, 70% of them Cumulus.

Flux also offered Titan nodes, available from the network's marketplace with the Zelcore wallet. Here there is no machine to manage: you can commit from 50 FLUX, but the funds are locked for 3, 6 or 12 months, for an announced return of 7.5 to 8.5%. This is closer to staking than to a masternode.

How much do you need to invest?

At the time of filming, FLUX was worth about €0.49, with the euro roughly at parity with the dollar. So you needed a little over €6,000 to gather the 12,500 FLUX for a Nimbus node. Cryptocurrencies had just fallen sharply, and FLUX had already traded much higher in the past.

Our advice: think in terms of the number of FLUX accumulated per month and per year rather than in euros. It is the price at the time you sell that sets the value of what you have accumulated. In our view, a period when cryptocurrencies are cheap is an interesting time to acquire masternodes, since the collateral costs less.

VPS or mini PC at home: the comparison

A masternode must stay online at all times. There are two options:

• A cloud VPS: the machine is rented in a data centre, and there is nothing to install at home;
• Self-hosting: a mini PC runs at your place. The one in our comparison draws less than 50 W and has a 250 GB NVMe SSD.

The costs at the time:

• Cumulus: about €300 over 12 months with a VPS, €500 over two years. Self-hosted is slightly more expensive, electricity included, and the two options are almost level over 24 months;
• Nimbus: €540 for one year with a VPS, versus €860 self-hosted. Over 24 months, the VPS comes to €1,050.

The mini PC costs more up front, but you buy it once: the longer you keep it, the better value it becomes. The VPS, on the other hand, spares you any technical constraints at home.

The constraints of self-hosting

Hosting a node at home requires some network settings on your internet router. We should warn you: if you already work in IT, you will manage without much trouble; otherwise it is trickier. By default, the number of nodes is also limited to eight on a single connection.

Our own nodes

We show you our own nodes: one Cumulus and two Nimbus, about 26,000 FLUX of collateral in total.

So, still profitable?

Our conclusion: at that point, you could expect a return of about 15% per year in FLUX, or even more depending on the node type. This return is expressed in FLUX: its value in euros depends on the price when you sell.

What about today?

The FLUX price, the number of nodes and the network rewards have changed since 2022: the returns and costs above are no longer current. Before making any decision, check the current conditions of the Flux project.

To learn more about Flux, read our article on Flux's proof of useful work, browse all our video tutorials, or contact us with any questions.

This article summarises the content of the video and does not constitute investment advice.