Pi Network just announced their first version of rewards issuance formula. As previously stated, the Pi network will implement the new mining process by following the steps outlined below. These processes will occur independently of and concurrently with the planned mass KYC verification and Pi balance migration to the Mainnet blockchain.
Implemented from March 1, 2022:
A methodology for reducing reward issuance will be implemented. The systemwide base mining rate (B) will be reduced in particular, based on a projected monthly supply limit, where B remains constant for a month and then drops each month. The mining mechanism remains unchanged until March 14.
Upcoming on March 14 (Pi day), 2022:
The new mining technique will go into effect, with new payouts stated in the December Whitepaper. Pioneers will be able to boost their individual mining rate by contributing to the network in new and more diverse ways, such as through Pi lockup, app usage, and node operations.
Pi Network’s new mining rate and Rewards Issuance Formula
On March 1, 2022, Pi Network released their initial version of the Rewards Issuance Formula —the decreasing exponential function described below — with the system-wide base mining rate (B) being reduced based on a monthly supply restriction. B has reduced to 0.02367198839 Pi per hour, and will remain constant until March 2022, after which it will drop monthly.
Note that the new base mining rate will take effect once your current mining sessions, which may still be using the old rate, are completed. This method is intended to keep Pioneer mining payouts under the 65 billion overall supply limits specified in the December Whitepaper for mining incentives. The network’s needs for expansion, accessibility, lifespan, and scarcity are all balanced by this diminishing exponential function and the novel mining method. It also adjusts the Pioneers’ awards for their contributions to the network.
Despite the reduction in B, Pioneers will soon have many more opportunities to contribute to the network in other ways and increase their individual mining rates. One of the goals of the new mining mechanism is to achieve this. The new mining mechanism, as well as the new categories of rewards: lockup, app usage, and node operation—will go into effect on March 14 (Pi day) 2022, as stipulated by their respective equations in the December Whitepaper.
The first version of the diminishing network rewards issuance formula, as well as the planned new mining mechanism, represent a significant step forward in the construction of the Pi Network Token Model and Mining architecture during the Mainnet phase. These gradual phases demonstrate how the network might execute on specific equations based on continuing observations, as well as token modeling and simulations, during the Enclosed Mainnet period.
Please note that the Rewards Issuance Formula below is the first version, as it is hard to accurately predict future data on Mainnet and from fresh mining. The 35 billion remaining supply for future mining rewards, Pioneer lockups, and general ecosystem parameters were used to create this first version, which was based on prior data, simulations, and best assumptions. For instance, the remaining 35 billion Pi is calculated using the most recent data on genuine Pioneers’ cellphone accounts. The speed of network KYC and how much Pi is migrated to the Mainnet in the future will define a more precise figure. More data and continuous simulations will assist examine the underlying assumptions in the rewards issuance formula, which could lead to the formula being adjusted to align with the network’s aims, as mentioned above.
Supply_limits (expressed in Pi/day) = exp (− last_day_total_mining_rewards / 1220) • 35,000,000,000, where
- The output of this formula is supply limits, which distributes a certain amount of Pi to each day for an indeterminate period of time, while ensuring that total future issuance does not exceed the remaining available supply.
- The total Pi mining rewards issued the previous day are equal to last day total mining rewards.
- 1220 is a tuning factor that will be fine-tuned in the next months.
- The expected number of Pi accessible for Pioneers to mine is 35 billion.
How is today’s B calculated?
B will be dynamically updated, according to the December Whitepaper, to keep mining reward issuance within supply restrictions for a set period of time. Annually, monthly, daily, hourly, or even more minute time periods are all possibilities. For clarity, Pi Network is starting the dynamic B on a monthly basis, which means that B will remain constant for a month before being changed at the end of each month depending on the rewards’ issuance formula and the network’s mining operations. Beginning with a B that remains constant for a month, Pioneers can better understand the implications of 1) new supply limits (came into effect from 1st of march), 2) a new mining process with new rewards (effective March 14th, 2022), and 3) a more dynamic nature of B (potentially in the future) one at a time, given that these concepts are complex and all have an impact on Pioneers’ mining rewards. At the same time, a monthly period is short enough to address any potential over- or under-issuance of Pi straying from the rewards’ issuance formula, while B remains steady long enough for Pioneers to follow along and modify their network contributions to mine for rewards.
So, the new B effective from 1st of March 10, 2022, is calculated by adding the first month’s daily supply limits from the above rewards issuance formula, dividing it by 31 (number of days in March) for even daily allocation within the month, and then dividing it again by the sum of coefficients of mining rewards of all active Pioneers on the last day of February—including their multiples of Referral Team and Security Circles rewards, and their estimated multiples of lockups, App Usage — for even daily allocation within the month (Please refer to December Whitepaper: Section: Mainnet Mining Formula to understand how to calculate B). In the future, similar iterations will take place every month. For example, on April 1st, B will be adjusted using this formula’s supply limit for the second month and the sum of all active Pioneers’ reward coefficients from the last day of March. This B will remain constant until April 1st, when it will be updated again.
When B remains constant over the course of a month, the overall amount of Pi mined varies depending on the real total contributions of the actively mining Pioneers throughout that month. The total number of Pi actually mined will be compared to the number forecasted by the algorithm at the conclusion of the month. Any monthly difference between the two figures will result in a further adjustment to the remaining Pi supply over the indefinite mining term, as well as any other types of modifications described above, such as the projected 35 billion remaining mining rewards supply.
As a result, the monthly B could result in an over- or under-issuance of Pi, causing a divergence from the reward issuance formula. If the monthly variance is consistently substantial, the network can switch to a more dynamic version of the B model, in which Pi is issued monthly but B is changed on a more granular time period basis. The smaller time period for changing B to follow the formula, the lower the risk of over- or under-issuance in comparison to the planned supply limits, and the lower the risk of deviation from the formula during that time period. More data on Mainnet and the new mining process will aid in the evaluation of the current monthly dynamic B’s efficacy and the determination of whether a more dynamic version B is required.
What can Pioneers do?
Despite the fact that the standard mining rate has decreased, new mining prizes are on the way. On Pi Day, March 14, they’ll make another announcement to kick off the new mining mechanism and prizes, as well as explain how Pioneers can boost their individual mining rates by making various forms of contributions. Until then, you can enhance your individual mining rates by doing the following:
- Continue mining as usual to receive the new system-wide base mining rate,
- completing your Security Circle in order to get the most out of your Security Circle benefits,
- To increase your Referral Team incentives, invite your friends to mine Pi.
- Reminding your existing Referral Team to mine.
Furthermore, before the new mining process takes effect on March 14, Pioneers should set up their lockup configuration, examine how lockups can enhance their mining rate in the new mining simulation interface, and commit to a lockup configuration. To set up your lockup setup, go to the “Lockups” button on the home screen. The lockup mining boost will be higher, with the higher the lockup percentage and the longer the lockup time.
More on Pi Network
- Pi Network’s Mainnet Preparation updates and Preselect Mainnet Lockup
- Pi Network: Name update appeal feature
- Pi Network’s pilot KYC solution released
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