Pi Network new mining rate and reward formula

On March 1, 2022, the declining rewards issuance formula took effect. In particular, the systemwide base mining rate (B) was reduced based on a monthly supply limit defined by the formula, which is described in the following sections. B stays constant for a month and then gets adjusted every following month based on the formula. On March 14, 2022, the new mining mechanism, which includes new rewards specified in the December Whitepaper, took effect. Pioneers are now able to increase their individual mining rate by making newer, more diverse types of contributions to the network via Pi lockup, app usage, and node operations.

Based on the rewards issuance formula, the base mining rate (B) decreased again on April 1st, according to the plan. This new B takes effect when a Pioneer launches their first new mining session in April and will stay constant throughout the month. There will be a new B in May. Below are more details, announced on March 1st, about the rewards issuance formula, how B is calculated, and what Pioneers can do to increase their individual mining rate.

New Mining Rate and Rewards Issuance Formula

The first version of the Rewards Issuance Formula was announced March 1st 2022 —the declining exponential function described below—whereby in combination with mining activities, the systemwide base mining rate (B) is reduced based on a monthly supply limit determined by the formula. The monthly decrease in B occurs on the first day of each new month and remains constant through the end of that month. B will continue to be adjusted based on the formula and decrease on a monthly basis in the future. Note that the new base mining rate will take effect upon the start of each Pioneer’s first new mining session of the month.

This formula intends 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. This declining exponential function along with the new mining mechanism balances the network’s need for growth, accessibility, longevity, and scarcity. Additionally, it right-sizes the Pioneers’ rewards for contribution to the network.

Even though B is reduced, Pioneers now have many more avenues to make other types of contributions to the network and boost their individual mining rates. This, in fact, is one of the purposes of the new mining mechanism. On March 14 (Pi day), 2022, the new mining mechanism took effect along with the new types of rewards: lockup, app usage, and node operation—as specified by their respective formulae in the December Whitepaper.

Together, the first version of the declining network rewards issuance formula and the new mining mechanism mark a major advancement in the development of Pi Network’s Token Model and Mining design during the Mainnet phase. These incremental steps further exemplify how the Enclosed Mainnet period offers the network opportunities to iterate on specific formulae based on ongoing findings as well as token modeling and simulations.

Please note that the declining exponential formula below is the first version of the Rewards Issuance Formula, as it is impossible to precisely predict the future data on Mainnet and from new mining. This first version was designed based on past data, simulations and best assumptions, such as the 35 billion remaining supply for future mining rewards, Pioneer lockups and overall ecosystem factors. For example, the 35 billion remaining Pi is estimated based on the currently available data about real Pioneers’ mobile balances. A more accurate figure will be determined by the speed of network KYC and how much Pi is migrated to the Mainnet in the future. Further data and continual simulations will help assess such underlying assumptions in the rewards issuance formula, and thus, may lead to the formula’s adjustment in line with the network’s objectives as explained above.

supply_limits (expressed in Pi/day) = exp (-last_day_total_mining_rewards / 1220) • 35,000,000,000, where

• supply_limits are the output of this formula that allocates a specific amount of Pi to each day for the indefinite time while making sure the total future issuance will not exceed the remaining available supply,
• last_day_total_mining_rewards is equal to the total Pi mining rewards issued on the previous day,
• 1220 is a tuning factor to be further tuned over the coming months, and
• 35 billion is the estimated number of Pi available for Pioneers to mine going forward.

How is the Monthly B calculated?

The December Whitepaper stated that the systemwide base mining rate (B) will be dynamically adjusted to keep the mining rewards issuance within supply limits for a certain period of time. The time period could be yearly, monthly, daily, hourly, or even more granular. For simplicity, we are starting the dynamic B on a monthly basis, meaning that B will stay constant for a month and will be adjusted based on the rewards issuance formula and the network’s mining activities at the end of each month. Starting with a B that stays constant for a month helps Pioneers understand the implications of 1) new supply limits, 2) the new mining mechanism with new rewards, 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 effect on Pioneers’ mining rewards. At the same time, a monthly period is short enough to correct any potential over- or under-issuance of Pi deviating from the rewards issuance formula while B is stable long enough for Pioneers to follow along and adjust their contributions to the network to mine for rewards.

Each month’s B is calculated based on the supply limit for the month based on this formula and the sum of all reward coefficients of all active Pioneers from the last day of the previous month. This B stays constant through the month and updates again on the first day of the next month. This adjustment of B occurs each month.

More specifically, the value of B for a given month is calculated by summing up the daily supply_limits for the month from the above rewards issuance formula and dividing it by the number of days in the month for even daily allocation within the month and dividing it again by the sum of coefficients of mining rewards of all active Pioneers of the last day of the previous month—including their multiples of Referral Team, Security Circle, Pi Lockup, App usage, and Node Operation rewards (Please refer to December Whitepaper: Section: Mainnet Mining Formula to understand how to calculate B). Similar iterations occur each month.

When B stays constant in a month, the total number of Pi actually mined every month varies with the total number of actively mining Pioneers and the contributions they make in that month. At the end of the month, the total number of Pi actually mined will be compared with the number initially projected by the formula. Any deviation between the two numbers each month will lead to a further adjustment on the remaining Pi supply, across the remaining indefinite mining period, along with any other types of adjustments explained above, e.g. the assumed 35 billion remaining mining rewards supply.

As such, the monthly B can potentially cause an overissuance of Pi when there is an unexpected increase in the number of Pioneers and their mining rates, leading to a deviation from the rewards issuance formula. If such deviation on a monthly basis is constantly large, the network can move to a more dynamic version of the B model where the monthly issuance of Pi remains constant but B gets adjusted on a more granular time epoch basis. The shorter the time period for adjusting B to follow the formula, the less is the potential for over- or under-issuance against the targeted supply limits, and the less is the chance for deviation from the formula over that period. More data on Mainnet and the new mining mechanism will help examine the efficacy of the current monthly dynamic B and determine if a more dynamic version B is necessary.

How Can Pioneers Mine More Pi?

Although the base mining rate has dropped, Pioneers have multiple ways to increase their individual mining rate, accentuating the importance of making more contributions to the network. In addition to mining everyday, you can boost your individual mining rate by:

• completing your Security Circle to maximize Security Circle rewards,
• inviting your friends to mine Pi to increase Referral Team rewards,
• reminding your existing Referral Team to mine,
• setting and commiting to a lockup configuration or increasing your current lockup commitment,
• engaging with the apps on the Pi Browser directory to increase App Usage rewards, and
• running a Node on the Testnet to increase Node Rewards.

Please refer to the December Whitepaper to understand different reward formulas. And keep in mind that, as mentioned in the December Whitepaper, all formulas of new mining are subject to some tuning.