In addition to traditional Proof of Work (PoW) rewards for mining Dash, users are also rewarded for running and maintaining special servers called masternodes. Thanks to this innovative two tier network, Dash can offer innovative features in a trustless and decentralized way.
Masternodes primary function is to carry out the anonymization phase of the Darksend protocol and to validate transactions almost instantly. In the future, there will be more services performed by the masternodes network.
In return for providing this services, one masternode is selected by the network to receive a part of the reward of each mined block. The split of the reward evolves following this table:
In order to run a masternode, a user must put up 1000 DASH as something akin to collateral, though unlike traditional collateral, the Dash never leaves the user’s possession. It can be moved or spent at any time by the user – doing so simply removes the masternode from service and makes it ineligible to receive rewards.