Congratulations on successfully setting up your Masternode! Setting up Masternode is a great way of earning passive income in crypto space. There are several ways to check if your Masternode is working or not. While you can verify and ensure that you’ll receive payments; the real excitement comes when you receive the first payment to your Masternode wallet. One of the common question among beginners is can I spend / withdraw my Masternode rewards? Sure you can! If so then how do I safely remove the Masternode payments? Here in this guide we’ll show you how to withdraw Masternode rewards safely without affecting your node.
Have you just received your first Masternode payment? Congratulations! You can hold all those rewards and setup a new Masternode or you can withdraw right away and spend them. The decision is up to you. But whatever you do you must ensure that you are not affecting the collateral amount that activated your Masternode.
You must first understand that all of your Masternode rewards will go to the same address where you initially deposited payment to run the Masternode. Since all of your payments end up in same wallet address you must be careful to not touch the original transaction. Failing to do so will cause your Masternode to go offline and it will drop of from the payment list. As a result you won’t receive any further payments until unless you re enable it.
You can simply withdraw your Masternode rewards but your wallet client doesn’t know which unspent outputs to use in the transaction. It kind of chooses randomly so there are chances which might affect your Masternode collateral amount. Therefore before withdrawing from a Masternode address we need to ensure that the collateral unspent transaction output remains untouched. We can prevent this by locking the original transaction where the coins are held. Let’s see how it’s done.
How to withdraw Masternode rewards safely
In QT wallet there is a feature called “coin control” that offers a convenient method of withdrawing Masternode payments without affecting the node. Coin control feature option can be found on any QT wallets and it allows you to control how you spend the coins in your wallet. In order to lock your Masternode collateral amount (1000 coins) and to safely remove the rewards from the masternode address we need to use this “coin control features”.
By default this feature is disabled. You can enable “Display coin control features” from your wallet settings. In most wallet its under Settings >> Options >> Wallet and in some wallet it can be found in Preferences >> Display.
Once you enable this you don’t have to restart your wallet. It will automatically add this feature in the send tab of your wallet. As you’ve enabled this; now let’s see how to lock the collateral and spend only the rewards amount.
Locking Masternode and removing rewards
1. Head to the send tab of your wallet. You’ll notice that “coin control features” has been added.
2. Next click on the Inputs button which will open a pop up window for coin selection.
3. Now you’ll see your Masternode and all the other addresses being listed there. For easy understanding switch to “Tree Mode”.
4. Now drop down the Masternode and you’ll see all of its reward being linked to its address.
In most recent wallet this amount will remain locked by default and you’ll see a lock symbol next to it. In your case If it is not locked then right click on the 1000 coin deposit and select “Lock unspent”.
It will gray out and lock that particular transaction. That’s it! Your Masternode is locked and safe. You cannot spend it until unless you manually unlock this.
You can go ahead and choose all the rewards from the list and click on OK which will bring back to send tab. Enter the address where you’d like to send, choose the after fee amount and click on Send. Hope it helps!
Things to Note:
- Masternode payments can only be spend after few confirmations and that number varies from coin to coin. So ensure that the reward amount has been matured before sending coins.
- This coin control feature cannot be found on hardware wallets like Trezar wallet or Ledger wallet. If you are using one of them then there is a different procedure to withdraw payments which we’ll cover in a separate article.
- Not just this. But there are many other uses for coin control features. You can use this to enhance privacy. You can combine the inputs to maximize the staking potential and much more. We’ll explain all of that in another article.