Pi Network (PI) recently changed its mining rate significantly, lowering it by 5.6% starting on October 1, 2023. Initially with this action, Pi Network continues to regulate its mining incentives and coordinate them with its supply constraints. In contrast to other well-known cryptocurrencies like Bitcoin (BTC) and Litecoin (LTC), the network chose to implement monthly modifications, which demonstrates its dedication to building a just and sustainable ecosystem for its users.
Understanding Pi’s Mining Rate Reduction
Specifically to efficiently manage mining rewards, Pi Network unveiled the “Declining Rewards Issuance Formula” in March 2022. By establishing a monthly supply cap, the formula ensures rewards are controlled. It adjusts Base Mining Rate (B) to prevent exceeding 65 billion Pi supply. Pi’s approach differs from typical cryptocurrencies, as it implements monthly reductions instead of periodic halving events. It maintains the monthly Base Mining Rate (B) and decreases it according to the formula.
B decreased 5.6% in the most recent drop on October 1, 2023, going from 0.0101105 to 0.0095401 Pi per hour. The method’s goal is to decrease the circulating Pi tokens and create deflationary pressure, akin to Bitcoin’s halving events.
The Reward Issuance Formula Explained
The Pi Network’s mining algorithm is built around the Reward Issuance Formula. Its implementation ensures mining rewards do not exceed the 65 billion Pi supply ceiling. In addition this equation uses an exponential function to determine supply restrictions, distributing a certain amount of Pi each day while ensuring that future issuance stays within the available supply. This algorithm changes the monthly Base Mining Rate (B) to maintain a stable and equitable ecosystem.
Hence, Pi Network stated that the reward issuance formula was introduced to ensure that Pioneer mining rewards are within the total supply limit of 65 billion allocated for mining rewards, as announced in the December Whitepaper.
Calculating the Monthly Base Mining Rate (B)
Moreover the monthly B calculation relies on the supply limit determined by the rewards formula and the reward coefficients accumulated from active Pioneers on the previous month’s last day. Pioneers can participate in mining and receive rewards through this computation, enabling prompt formula error corrections and maintaining B stability.
3-month price prediction for PI, via CoinCodex
The Future of Pi Network
Pi Network has demonstrated its dedication to developing a clear and predictable mining rewards scheme by using the Declining Rewards Issuance Formula. Moreover Pi Network strives to create a fair and stable environment by aligning mining incentives with supply constraints and implementing regular adjustments. Thus these aspects foster a regulated and equitable approach to mining rewards as the network progresses towards its mainnet launch.
It’s important to keep in mind that Pi Network is in its development phase, with no fixed launch date for its open mainnet. Users should exercise caution and conduct thorough research, particularly considering ongoing investigations by authorities in certain regions.
In conclusion, Pi Network’s choice to implement monthly mining rate decreases is a calculated step towards realizing its long-term cryptocurrency ambition by ensuring the viability and fairness of its ecosystem.
Featured Pic: Binance Feed.com
Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice.
