The new token will pay the 1000 Dash collateral, currently valued at a little under $500,000 USD, to set up a Dash Masternode. Dash Masternodes get 45% of the mining rewards, which is around 2 Dash per Masternode each week. The ownership of a Dash Masternode will also give FirstCryptoETF the ability to have 1 vote in treasury proposals.
Peter Vrábel, CEO of FirstCryptoETF, describes the “rewards from the mining fees will be something like a dividend for token holders,” and a “great way to add additional value to the Strategy Index.” The Dash investment will join the nine other cryptocurrencies in their portfolio: Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Ethereum Classic, Lisk, Monero, and Zcash. FirstCryptoETF pledges to be audited by one of the big four accounting firms to verify the status of the portfolio. According to the Whitepaper, they will also charge a 2% per annum fee pro-rated to the time a user held the token along with offering an exchange platform and physical debit card to facilitate usage of the token.
Desire to hedge risks with inclusion of a masternode
Last year, the SEC rejected a proposed Bitcoin ETF, but a few days ago, Coinbase announced their desire to launch a cypto ETF only available available to US accredited investors (annual income more than $200,000 or a net worth more than $1 million). FirstCryptoETF will launch their ETF via a token through an ICO.
A common tenant of investments is to diversify across and within sectors to minimize risks. The emergence of Bitcoin futures with the CME and CBOE allow a degree of hedging for investors, but only so much. ETFs (Exchange Traded Funds) tracks an index, fund, or basket of goods to offer more investors the ability to diversify across a larger degree of goods for a lower price. However, in financial markets, an ETF does not entitle the investor to the underlying index or basket of goods, but only to the dividends and profits generated by the ETF’s underlying security. Thus, a crypto ETF will track cryptocurrencies and their underlying value, but not entitle users to direct use of said value: the network of users that use a specific cryptocurrency.
As follows, FirstCryptoETF will focus primarily on cryptocurrency investing rather than cryptocurrency transacting. Thus FirstCryptoETF users, more or less, have an investment currency and not a usable currency, which creates risks if the inherent investment declines in value. The investment in a Dash Masternode offsets this risk with an assurance to users that there will be a regular FirstCryptoETF payout in the form of a “dividend”.
Dash’s value is in its robust network
The Dash Masternode system demonstrates their value security by imparting value onto others, such as FirstCryptoETF and their future buyers. Dash Masternodes have been criticizes for being too expensive and thus exclusionary and centralized, but FirstCryptoETF demonstrates that this does not have to be the case. A large buy-in that favors early adopters provides an economic incentive against vandalism, but is also not fully exclusionary because of the ability for many people to pool money to create an organization and operate a Dash Masternode.
The value of investing in a Dash Masternode arises, not from speculation, but from the security and confidence in the extensive Dash cryptocurrency network. Dash is primarily a currency since there are many establishments to exchange Dash for goods and services. If a merchant does not directly take Dash, then users can get a Dash debit card to make purchases via fiat.
Dash’s reputation within the crypto space is growing as a reputable and stable form of governance that can reasonably secure an investment because of its reliability as cryptocurrency to exchange value for everyday purchases.