INDX Capital is a blockchain-based platform that aims to help cryptocurrency owners benefit from the power of its masternodes. It’s a concept looking to capitalise on new opportunities within the existing crypto ecosystem.
INDX Capital was launched in 2018 and is powered by SWARM, an infrastructure provider involved in the security token investment industry. Other names that collaborate with the fund are the London Block Exchange and Tyr Capital Partners.
What are masternodes?
Let’s back up a step first. What exactly are masternodes?
A masternode is a type of cryptocurrency full node that holds a complete copy of the blockchain in real time. In some ways, masternodes are a more efficient version of mining. The Proof-of-Work algorithm is losing popularity due to inefficiency, and masternodes are an alternative way of validating data.
They support a blockchain infrastructure that requires less computing power and is more secure against 51% attacks.
Protocols that rely on masternodes use them for governing the network and verifying transactions, besides storing a copy of the blockchain. In return, the host of a masternode receives compensation in the form of the project’s native digital coin or token.
Masternodes also increase the privacy of transactions and can now also complete instant transactions on the blockchain. Cryptocurrencies like Dash and NEM use masternodes with the Proof-of-Stake algorithm to increase efficiency and improve security.
How masternodes work
Masternodes require servers with an unlimited internet connection. One of the obstacles of running a masternode is the high minimum operational coin balance attached to the owner’s wallet.
So, depending on the blockchain for which you plan to run a masternode, you need to own a specific amount of coins – 1,000 DASH for Dash, for instance. Once you have the required funds, you need to synchronise your wallet with the blockchain and create a node wallet to store your digital assets.
Setting up and managing a masternode requires advanced levels of technical knowledge. Without this, you won’t be able to maintain processes or collect rewards. This is why most end-users can’t get direct access to the benefits of investing in masternodes.
How INDX Capital helps you invest in masternodes
INDX Capital is looking to monetise masternodes to generate passive income. This is because masternodes generate revenues every time they validate a transaction.
The blockchain-based start-up has created a sort of index fund and plans to use capital to make strategic investments in multiple masternodes.
The INDX algorithm was designed to scan masternodes across cryptocurrency ecosystems and identify the best investment opportunities. Then, it applies filters to segment masternodes and chooses only the ones with low risk and volatility.
The algorithm automatically re-balances the portfolio to keep risk levels low and continue providing high revenues.
This way, INDX Capital manages to provide end-users with a diversified portfolio that maximises their return on investment.
Here are the three key elements promoted by INDX Capital:
- Access to passive income opportunities
- Low investment risk, thanks to a diversified offering by investing in multiple masternodes
- Strategies based on previous data to counter volatility
INDX Capital claims to have enough information to empower the INDX algorithm thanks to the 2018 market downturn. The founders seem confident about the ability of the algorithm to identify and minimise investment risk.
The INDX token
Since masternodes require extensive knowledge and resources, INDX Capital plans to use STO funds to build a strong portfolio. Users can buy INDX tokens during the STO.
The purpose of the INDX token is to provide investors with access to cryptocurrency markets. It enables owners to earn passive income as well as any possible benefits from an increase in the token’s value.
INDX is an SRC-20 token built on top of the Ethereum protocol (the ERC-20 standard with a security compliance layer). The total supply consists of 60 million INDX, with 83% of them available for sale during the STO. INDX plans to raise up to $15 million.
The founders plan to grow the value of the token on exchanges by reinvesting the rest of the profits into the fund.
INDX Capital hosts its masternodes on enterprise-level servers and promises a leading security certification.
The takeaway
INDX Capital is planning to give all cryptocurrency owners access to new investment opportunities that would have otherwise remained off-limits. The fund is planning to capitalise on the ability of masternodes to generate income with minimum risks.
However, keep in mind that masternodes pertain to cryptocurrency projects, which are still considered extremely risky investments. No investment is 100% secure, and no algorithm can guarantee ROI. So be sure to keep that in mind if you’re thinking about investing in masternodes.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.