Base mining rate for Pioneers has reduced 5.6% in October

Pi Network (PI) has announced that the base mining rate for the pre-Mainnet network has reduced, as of 1st October 2023. This reduction was codified in the protocol on 1st March 2022, when Pi Network opted for a monthly adjustment as opposed to a longer timeframe reduction as seen on other prominent mining blockchains such as Bitcoin (BTC) and Litecoin (LTC).

Graph showing the monthly adjustment to the base mining rate on Pi Network

For reference, BTC goes through a halving process that occurs every 210,000 blocks, or approximately every four years. This reduces the base mining rate by 50% each time, with the next BTC halving expected in March 2024 to bring mining rewards down from 6.25 BTC to 3.125 BTC.

Pi Network’s mining rate reduction works in a similar way, except it occurs every month and uses a variable rate known as the exponential function. This process helps to make the number of PI tokens in circulation more scarce, which provides deflationary pressure for the current circulating supply.

“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 adjusted based on a monthly supply limit determined by the formula.” — via the Pi Network whitepaper

The exponential function described in March 2022 outlines the process of adjusting the base mining rate on a monthly basis within set supply limits. These adjustments will occur until the remaining 35 billion tokens from the PI total supply are put into circulation.

The project has revealed that the new mining rate for PI is 0.0101105, down 5.6% from last month’s figure of 0.0095401 PI per hour. Pioneers are able to increase their base mining rate by interacting with the ecosystem in various ways, including staking PI tokens and referring other users to the network.

Algorithm predicts imminent +212% move for PI, expects current uptrend to continue into the new year

Despite PI still being in its pre-Mainnet phase of development and PI tokens not actually being in circulation on the open market, some exchanges have begun to offer IOU contracts to support PI trading.

The IOU value of PI tokens has risen 43.59% in the past three months, owing to the project’s rapid adoption rate and a series of bullish developments. Notably, PI tokens were used in a peer-to-peer transaction for the first time and the asset is now the second-most-owned cryptocurrency in South Korea.

Despite experiencing a slowdown in the IOU price volatility, the CoinCodex price prediction algorithm expects PI to keep on moving upwards in the coming months. In the past month, PI has fallen 29.7% in a retrace from its recent high, yet the algorithm expects a sustained recovery from this level before the end of the year.

By November, the algorithm expects PI to breach its recent high by forming a peak around the $70 price level. This would be a 212% move from the current value, before a gradual retrace takes place heading into the new year.

3-month price prediction for PI, via CoinCodex

Bottom line: Pi Network’s base mining rate reduction makes the circulating supply more scarce

Pi Network’s mobile-first mining system has enabled it to achieve widespread adoption during its earliest stages of development. The network has yet to launch its open mainnet, yet an estimated 47 million people have downloaded the Pi application to support the infrastructure and mine PI tokens.

The mining rate reduction that took place on 1st October is the latest in a series of monthly adjustments. The -5.6% drop in base mining rate will make every PI token mined more valuable through its increased scarcity, which is a similar function served by Bitcoin’s (BTC) halving event that takes place every four years.

The CoinCodex price prediction algorithm has remained fully bullish on the future of PI in recent weeks. The algorithm expects the token to continue its gradual ascent before the network’s mainnet launches in the future, with a $70 price level forecasted before the end of 2023 and significantly higher levels forecasted after that.