REWARD SYSTEM

There are many characteristics of the Reward System that the average user may not be aware of. The main ones are described below, but there is much more that was considered when designing it. Eventually, we plan on having each described in detail in a White Paper, but until then, please review the information below, and join us on Slack if you have any further questions.

Minting

Starting in May 2017, the number of new PIVX coins minted is exactly 2,628,000 per year. (Except on a Leap Year, when it is 7,200 more.)

For the first year, this works out to approximately 4.8%, but decreases slightly each year since the total increases. For example, in year 2040, the rewards work out to approximately 2.0%.

Distribution

These minted coins are distributed such that up to 10% is allocated to the Treasury for proposals that pass and are finalized, and 90% is split between both Masternode Owners, and Stake Holders.

The ratio of the split of the 90% is determined by the ‘Seesaw Algorithm’. It’s purpose is to ensure there is a healthy balance for the number of Stake Holders compared to Masternodes. For more details on that, please see the Seesaw Whitepaper.

Generally speaking, Masternode owners get more rewards, because their operating costs are higher. But if there are too many Masternodes, their rewards drop making Staking more profitable temporarily.

Inflation

When a government prints money, do they give it to the people, pro-rated to their net-worth? Of course not. They spend it on wars etc. The net result is the fiat is devalued considerably over time. That is called inflation.

With PIVX ‘mints’ new coins, 90% are paid back to the Masternode Owners and the Stake Holders. Therefore, that can’t be considered as ‘inflation’ when compared to how governments inflate a currency. Not. Even. Close.

So, to better compare to how people typically consider the definition of inflation, we should only include the 10% of newly minted PIV each year. As such, in May 2017 it has dropped to 0.48% and by the year 2040 it will be 0.20%.

Purpose

PIVX is designed to be a currency, and not as asset. People receiving a return on their investment are more likely to spend some of it. That supports its use as a payment method.

Enough Already! How much will I earn?

We would REALLY like to give you an exact number. That would be easy. Everyone would be happy. We could post glitzy ads with the ROI in big numbers. People could grab a calculator and punch in some numbers and smile! But, that smile might disappear once time has passed, and that same person checked against the original math. Huh? What do we mean when we say ‘might’ or imply the math won’t work?

The reward system by design has a lot of randomness built into it. We literally use the word ‘lottery’ to describe how the rewards are distributed. This is part of the security of the system. There are many technical factors too, like if your Masternodes go offline, your number of connections drops low due to ISP issues, or you forget to unlock your staking wallet etc. etc.

So, if you want a number that works for May 2017 thru April 2018, you can go with APPROXIMATELY 4.8% but in all seriousness, it will likely vary from that significantly.

Many people ask how many rewards they can expect to receive based on the number of PIVX they are staking. This graph gives a rough idea. As you can see, to receive on average, 1 reward per month, you need slightly more than 1,000 PIVX.

Still confused?

Please join our Slack and ask any question you like there! Get your invite at Slack.PIVX.org.

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