Master Key encryption no password?

Actually the masterkey is located in the database, not on the storage. You can also move the location of all the file keys for additional security.

https://doc.owncloud.com/server/admin_manual/maintenance/encryption/migrating-from-user-key-to-master-key.html under verify for the location.

In our highly secure Enterprise projects we do put the masterkey into a HSM in the meantime, which makes sure that the ownCloud administrator itself also can’t get to it when reconfiguring things. Of course this continues to rely on organisational protection.

As a last option there is End-to-End Encryption, an overview can be found here and your feedback would be valuable to me: