MASTERNODES In addition to traditional Proof of Work (PoW) rewards for mining Nucleon, users are also rewarded for running and maintaining special servers called masternodes. Thanks to this innovative two tier network, Nucleon can offer innovative features in a trustless and decentralized way. Masternodes are used to power PrivateSend, InstantSend, and the governance and treasury system. Users are rewarded for running masternodes: 90% of the block reward is allocated to pay the masternode network. Masternodes are resposible for processing both PrivateSend and InstantSend. Masternode owners must have possession of 100,000,000 Nucleon, which they prove by signing a message and broadcasting to the network. Those coins can be moved at any time, but moving them will cause the masternode to fall out of queue and stop earning rewards. Masternode users are also given voting rights on proposals. Each masternode has one vote and this vote can be used on budget proposals or important decisions that affect Nucleon. Masternodes cost money and effort to host so they are paid a percentage of the block reward as an incentive, which is 90% of the Block Reward PRIVATESEND PrivateSend gives you true financial privacy by obscuring the origins of your funds. All the Nucleon in your wallet is comprised of different inputs, which you can think of as separate, discrete coins. PrivateSend uses an innovative process to mix your inputs with the inputs of two other people, without having your coins ever leave your wallet. You retain control of your money at all times PROCESS PrivateSend begins by breaking your transaction inputs down into standard denominations. These denominations are 0.01 NEON, 0.1 NEON, 1 NEON and 10 NEON – much like the paper money you use every day Your wallet then sends requests to specially configured software nodes on the network, called “masternodes”. These masternodes are informed then that you are interested in mixing a certain denomination. No identifiable information is sent to the masternodes, so they never know “who” you are When two other people send similar messages, indicating that they wish to mix the same denomination, a mixing session begins. The masternode mixes up the inputs and instructs all three users’ wallets to pay the now-transformed input back to themselves. Your wallet pays that denomination directly to itself, but in a different address (called a change address) In order to fully obscure your funds, your wallet must repeat this process a number of times with each denomination. Each time the process is completed, it’s called a “round”. Each round of PrivateSend makes it exponentially more difficult to determine where your funds originated. The user may choose between 2-8 rounds of mixing This mixing process happens in the background without any intervention on your part. When you wish to make a transaction, your funds will already be anonymized. No additional waiting is required Note that PrivateSend transactions will be rounded up so that all transaction inputs are spent. Any excess Nucleon will be spent on the transaction fee