Sirwin
Sirwin

Episode 6 - Gala Nodes Analysis


Gala Nodes

Today I'm going to try and talk about Gala Nodes on for Gala Games. Gala Nodes is a fairly interesting concept, that I really haven't seen with other projects I'm following. Basically, Gala Nodes is a much more streamlined way of setting up a mining operation for the governance token for the Gala Games ecosystem $GALA.

Basically, all you need to do is buy a node, download a fairly small file, install the node software, and then run the node for 6 hours every day. Not a whole lot of work involved, and running 1 node is currently spitting out around 1,200 to 1,400 $GALA tokens per day, or roughly $20 in $GALA tokens per day.

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This is what the "Gala Soft Node" looks like

Current Gala Node Payout

The price of a node is currently around 2.5 $ETH. With $ETH trading around $1,800 per coin, a $GALA node is going to run you about $4,500. The price of nodes increases after a certain number of nodes is sold. I think there's going to be about 50,000 nodes sold.

I went and looked at the $GALA smart contract, and I found that there will be a total of 50 billion $GALA tokens minted. This is important, because once all of the tokens are minted, what is my node going to do? Well, the Gala Games announcements have indicated that perhaps the node can be used for proof of stake, or possibly for proof of storage after it's been used to mint the tokens.

I have no idea how that transfer will happen, but basically this node is a license, which will eventually be sellable in the open market, like an NFT.

  • You earn 1 point from the node for operating it for 6 hours during a 24 hour period.
  • The distribution cycle starts at 5:00pm CST. You also need your node to be on between 8:00pm and 8:30 pm CST to receive the payout.
  • Your payout is based on how many points you earn.
  • If you own more than 1 node license, you can earn more than 1 point as long as both are running for at least 6 hours.

What I find interesting, and I'll get into this in more detail below, is that basically the people who purchased the first few nodes could potentially have astronomical profits at this point. If they just took all GALA they minted in the early days and purchased more node licenses, they could be generating upwards of 100,000k GALA per day, or about $2k USD per day. That's some pretty darn good earnings.

For example, there is an address that earned 612 points today, which means it was running tons of nodes, and also probably had some referral bonuses as well. Those 612 points translated to 748k GALA. That's enough GALA to buy 2 more nodes. You do this every day and buy 2 nodes per day, within 100 days you now have 812 points per day, resulting in over 1 million GALA per day, or $16,000 per day in GALA tokens.

Gala Node Payout Analysis

Back to my comment from above about a total of 50 billion GALA tokens to be minted. I've noticed the last several days there have been around 8.5 million tokens minted per day. A total of 29 billion GALA tokens have already been minted. If we stay at the same rate, of total minted tokens, then there will be about 2,407 days left to mint all coins. That's about 6.6 years. At $20 per day, with no price appreciation in the GALA token, with 1 node today you could generate $48,140 from this node.

Obviously, for me, I've invested in this project because I really want to play the game Mirandus. I also think that the value of the GALA token will increase above $0.016. I don't think the value of the GALA token will go much above $1.00, as that would represent a $50 billion market cap. It's possible, but seems unlikely.

That said, I could see the value of the GALA token going to $0.16, which would mean instead of $48k, perhaps the node could generate a whopping $480k over 6 years. NOW we are talking some serious cheddar.

Pitfall

Now here's some unfortunate news. I've charted out the total amount of GALA created per day, since the inception of GALA nodes. GALA nodes appear to have been launched on 7/25/2020. The first day, each node generated 21,725 of GALA, or about $350 in today's USD. That's substantial. In the first week alone, if you ran a single node, you would have made $1,242 during just that first week. With that money, you could have purchased several more nodes based on the July 2020 price of ETH being much lower than $1k at the time....

I've mapped out the daily node returns, in USD and in quantity of GALA below. Notice a pattern?

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Daily GALA per point earned

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Daily Dollars per point earned

 

Okay clearly, there are diminishing returns over time, but the returns are not consistent, there's occasional large jumps in the value that a node pays out at seemingly random times. I'm pretty curious about the erratic nature of this, rather than just a smooth line. There does appear to be some sort of pattern, but with gaps.

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  • The green dotted line is my observed trend. Looks like of like a quadratic curve. The curve rapidly approaches zero, then levels off.
  • The Red Circles are unexplained drops, that don't follow the curve at all. Where did these coins go?
  • The Black dotted line identifies what appears to be a floor. That floor seems to have been touched several times, even in the early stages. Not clear why this would happen, but perhaps there is a minimum number of coins per node, that sits around 1,000 coins per day. Perhaps this is built in tot he smart contract (haven't really figured all of that out), in order to maintain value of the nodes.

This basically means that my value analysis above holds up relatively, but $480k may be a bit too high at a future $0.16 valuation of the GALA token after 6 years. Based on this analysis, I am going to predict that the GALA tokens produced by my node will be worth approximately $280k USD in 6 years.

On an original investment of roughly $4k, this would represent an annual return (compounded yearly) of about 38.50%. From my experience investing in the stock market for the past 10 years, an average return of around 10%, every single year compounded yearly, is quite strong. Given my analysis above, if this investment earns 38.50% per year, I would feel very good about this investment.

I will track the performance of this node over the next 6 years. I'll post regular updates to see how close my prediction turned out.

Last, you can see the weekly node payouts below, for a slightly less granular view:

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Weekly GALA tokens. You can see around 10k GALA tokens per week seems to be the floor.

Next week will be more telling, as we are approaching the floor.

 

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Weekly USD from 1 node. You can see the floor is just below $200 per week.

Again, Next week should be a bit more telling.

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Thanks for reading my post! Leave your questions below.

For other commentary, find me on Torum at https://www.torum.com/signup?referral_code=flarnrules

To help me become better at Town Star, and to earn some GALA tokens, join Gala Games through this link: https://gala.fan/HZP3wqIb_

If you are interested in PURCHASING a GALA Node, we both benefit if you use my link. I'll get 10 points on that day (so basically 10 extra days worth of points). PM me if you decide to buy a node, as I'll be sure to pay it forward once Mirandus is released.

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flarnrules
flarnrules

I like to paint, skate, and dabble in crypto investing.


My Crypto Gaming Journey
My Crypto Gaming Journey

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