Introduction

In the dynamic world of blockchain and cryptocurrency, innovation is a constant. One of the latest trends making waves is the concept of "Node Sale". Node Sale is a new form of fundraising and token distribution, adopted by most projects before the official mainnet launch.

This article delves into what Node Sale is, its benefits, notable examples, and the role of InfStones as a Node-as-a-Service Provider.

What is a Node Sale?

A Node Sale allows community members to purchase "Node Licenses" to operate nodes within a blockchain network. These nodes are critical for maintaining network security and decentralization by performing specific tasks for the blockchain, such as proof of stake, data verification, etc. Node Sale typically involves selling these licenses as NFTs, which can sometimes be non-tradable for a set period, fostering long-term commitment. In return, Node License holders contribute to network security and may receive protocol-determined returns for their participation. Or, the holders delegate the Node License to Node-as-a-Service providers if they don’t want the hassle of maintaining nodes on their own.

Such Node Sale projects always allocate a large portion of the token supply to reward node operators, creating significant profit opportunities. For example, XAI Games, a Layer 3 Game project on Arbitrum, allocated up to 50% of its token supply to reward node operators, along with airdropping over 1 million XAI tokens to node buyers as gratitude for early support.

Token Allocation Rate to Node Operators Among Different Projects

Benefits of Node Sales

Node Sales has several advantages as below:

Enhanced Network Decentralization and Security

Previously, running a node wasn't very common due to limited profit potential compared to the resources required for infrastructure and project expenses. However, Node Sale makes running a node a new trend because it encourages broader participation in network operations, enhancing security and decentralization.

By encouraging a broader community to operate nodes, the network becomes more decentralized and secure.

Broader and Deeper User Engagement

In previous projects, node operators and token holders were separate groups, and node operators were limited in number due to consensus mechanism constraints or high technical barriers. However, Node Sale often issues out tens of thousands of node licenses, encouraging license holders to participate deeply in network operations through token incentives. This extensive involvement leads to broader and deeper user engagement, where users are more organically organized and exhibit stronger vitality.

Fundraising Efficiency

Compared to private fundraising and public token sales, Node Sale offer several benefits:

• Token Retention within the Community: Unlike private fundraising, Node Sales avoid giving away large portions of the token supply to private investors. This method ensures that a larger share of tokens remains within the community, aligning incentives and fostering long-term project loyalty.
• Capital Efficiency: Node Sales offer a different approach to network participation and token distribution compared to traditional methods. With the same token incentives, Node Sale encourages more node operators, making the network more decentralized, secure, and robust to serve the project's long-term vision.
• Reduced Selling Pressure: Node Sales also reduce the pressure to sell tokens during the Token Generation Event (TGE). Tokens allocated for node operator rewards need to be vested over years through continuous node operation, preventing a large amount of tokens from flooding the market at once and thus stabilizing the token's value.

Successful Examples of Node Sales

• Aethir: One of the most successful Node Sales, Aethir sold over 70,000 Checker Node licenses, raising 29,000 ETH and achieving significant decentralization.
• Xai: One of the first Node Sales, XAI sold 50,000 nodes in December 2023, raising substantial capital and ensuring a robust network foundation.

Other notable projects include Gala, Hytopia, and CARV, all of which have leveraged Node Sales to secure their networks and fund their initiatives.

The Role of InfStones in Node Sales

While participating in a Node Sale allows users to contribute to network operations, the technical barriers to setting up nodes, and the ongoing costs and effort required to maintain node uptime can be significant concerns for many users. Fortunately, Node-as-a-Service providers offer comprehensive node services, eliminating users' worries about node operation.

InfStones, a leading Node-as-a-Service Provider, plays a crucial role in the Node Sale ecosystem. By offering robust and reliable node hosting solutions, InfStones ensures that even non-technical users can participate in Node Sale and get rewards.

Long-standing Experience

Established in 2018, InfStones has been providing node services for over six years, making it a veteran in the industry and one of the longest-serving providers in the market. Many projects require node operators to run their nodes for 3-4 years to receive full token rewards. This makes InfStones' longevity and reliability a must have prerequisite for these types of long-term commitments and peace of mind.

Trusted by Industry Leaders

InfStones has provided validator node services for some of the most renowned institutions in the industry, including Binance, OKX, BitGo, Circle, and CoinList. Validator nodes have stringent SLA requirements to avoid slashing penalties. InfStones' zero-incident track record and trust from major institutions highlight the reliability and quality of their enterprise-level node services, making them a dependable choice for Node Sale participants.

User-Friendly Platform

InfStones offers a comprehensive one-stop platform for node setup and operation. Its user-friendly UI allows users to seamlessly purchase services, delegate Node Licenses, and effortlessly monitor nodes, providing a smooth and self-service experience.

Potential Risks and Challenges

While Node Sales offer numerous benefits, they also come with risks:

Market Volatility: The value of tokens and rewards can fluctuate significantly.

Regulatory Challenges: Compliance with securities laws and tax obligations can be complex and ever changing.

Operational Risks: Ensuring nodes are continuously operational and secure requires technical expertise and resources.

Participants should understand that staking returns are determined by the protocol and may vary over time. Investors should carefully evaluate the project's fundamentals, the node's role within the network, and the potential return on investment before participating in a Node Sale.

Conclusion

Node Sale represents a novel and effective way to  encourage network participation, distribute tokens, and enhance network security in the blockchain space. It promises clear and significant advantages in terms of security, decentralization, and capital efficiency. InfStones, as a Node Service Provider, adds immense value by making it easier for a broader audience to participate in these sales and support the network.

As the crypto industry continues to evolve, Node Sale is likely to become an increasingly popular method for new projects to raise funds and secure their networks. Investors and blockchain enthusiasts should keep a close eye on this emerging trend and consider the opportunities and risks it presents. We, here at InfStones, certainly will!