Balancing Scarcity and Fairness: An Overview of the Pi Economic Model
The Pi Economic Model is designed to strike a balance between creating scarcity and ensuring that a large amount of Pi tokens do not accumulate into a few hands. The goal of Pi is to build an economic model that is sophisticated enough to achieve these priorities while still being intuitive enough for people to use.
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The token supply of Pi is divided into three parts: Mining Supply, Referral Supply, and Developer Reward Supply.
The Mining Supply is created by pre-minting a fixed amount of Pi for each person who joins the network, up to the first 100 million participants. This supply is then released over the lifetime of the member based on their level of engagement and contribution to network security.
The Referral Supply is generated as a referral bonus for both the referrer and the referee. This shared pool is meant to incentivize the growth of the Pi Network while also encouraging engagement among members.
The Developer Reward Supply is minted to fund the ongoing development of Pi and is progressively minted as the network grows.
In order to reward early members, Pi's individual mining reward and referral rewards decrease logarithmically as the number of people in the network increases. This helps ensure that early adopters are rewarded for their contributions to the network.
In conclusion, the Pi Economic Model is designed to create a sense of scarcity while also ensuring fair distribution and merit-based mining. By dividing the token supply into three parts and decreasing the rewards logarithmically, Pi aims to strike a balance between creating scarcity and avoiding extreme concentrations of wealth.
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