I have translated the white paper displayed in the app as of February 22, 2023, into Japanese.
I used a site called DEEPL, which is said to have high translation accuracy, and edited it for readability.

PiNetwork Overview and Participation Here
https://pinetwork.masters-all.com/start/

New White Paper Chapter

December 2021

Below is the new draft of the Pi Supply and Mining chapter of the white paper published in December 2021. Mining will continue in the Mainnet phase, but with a dynamically adjusted mining rate within a limited supply. For more details, please read the new white paper section that reviews the pre-Mainnet supply and mining mechanisms and explains how and why they will change in the Mainnet. We have also included the previously released Roadmap chapter at the bottom for your reference. We welcome your feedback before updating the official white paper at the launch of the Open Network.

 

Token Model and Mining

A well-thought-out and sound token design is essential for the success of a cryptocurrency network. It creates incentives that drive the formation and growth of the network, builds a utility-driven ecosystem, and thereby has the potential to support the underlying cryptocurrency of such a system. Examples include network growth, creation of fundamentals-driven utility, and mere store of value or medium of exchange in a crypto ecosystem. This chapter describes the supply of Pi and how Pioneers can mine Pi in different phases of the network, as well as the basic design theory of the various mining mechanisms, including incentives for network building and growth, utility, and demand. Note that Pi is a Layer 1 cryptocurrency operating on its own blockchain, and the term “token” here refers to it.

 

Pi Supply

The vision of Pi Network is to build the world’s most inclusive peer-to-peer economy and online experience, fueled by Pi, the world’s most widely used cryptocurrency. To realize this vision, it is crucial to grow the network and make Pi widely accessible while maintaining blockchain security and Pi scarcity. These goals have always guided the token supply model and mining design, but the key difference is that the pre-Mainnet phase focused on promoting network growth and widely distributing Pi, while the Mainnet phase will focus on rewarding more diverse forms of Pioneer contributions while solidifying Pi’s supply.

Pre-Mainnet Supply

In the initial phase, Pi Network focused on network growth and security. Increasing participation through bootstrapping is the most important thing for the network and ecosystem. Driven by the vision of making Pi the world’s most widely used cryptocurrency, the focus shifted further to growth by distributing Pi and making it globally accessible. Pi’s consensus algorithm relies on a global trust graph aggregated from individual Pioneers’ security circles. Therefore, it was important to incentivize Pioneers to form individual security circles. This means that the supply of tokens available as mining rewards was not explicitly capped before the Mainnet.

At the same time, it was important to maintain a certain scarcity of Pi. As explained in the Mining section, we adopted a mechanism where the mining rate halves every time the network grows tenfold, repeating halving events when the number of engaged Pioneers reached various milestones. The next halving event based on this model is when the network reaches 100 million engaged Pioneers. Currently, we have over 30 million participating Pioneers. The option to completely stop mining when the network reaches a certain size also remains. Since the option to cap the supply of Pi was not exercised before Mainnet, the total supply remained undetermined.

The pre-Mainnet supply model, with its mining mechanism designed for accessibility, growth, and security, has formed a community of over 30 million Pioneers and millions of security circles. The simple and accessible means of mining Pi on mobile phones has allowed for wide distribution of the token globally, including to those left out of the crypto revolution due to lack of capital, knowledge, or technology. In doing so, the network has avoided the extreme concentration of wealth seen in Bitcoin and other cryptocurrencies, and is poised to become a true peer-to-peer decentralized ecosystem with enough participants and transaction volume to generate utility.

Mainnet Supply

Supply is the engine of growth and provides incentives for contributions to the network necessary to achieve an organically self-sustaining ecosystem. Therefore, mining rewards will continue after Mainnet, but will take diverse forms to incentivize different types of contributions. This is discussed in the “Mining” section below. Regarding supply, the undetermined supply from the pre-Mainnet mining mechanism, which optimized for network accessibility and growth, poses several issues in the Mainnet phase, such as unpredictability of planning, over- and under-rewarding for different types of contributions needed in the new phase, and challenges to scarcity. To address these issues, we will transition from the pre-Mainnet supply model, which is entirely dependent on network behavior, to a Mainnet supply model with a clear maximum supply.

The issue of planning unpredictability in the pre-Mainnet supply model surfaced during the first Pi Network COiNVENTION held in September-October 2020, where community panels and submissions debated whether mining should be halved or stopped at the network size of 10 million at that time. From the diverse voices of community members, the following dilemma was presented to the network: If mining continues based on the current (pre-Mainnet) mining mechanism, concerns about supply due to uncertainty, and thus Pi scarcity, will arise. However, if mining stops, network growth will be hindered, new Pioneers will not be able to join the network as miners, and Pi accessibility will be compromised. This dilemma, however, still remains and needs to be resolved.

How the community can achieve continued growth and accessibility while addressing supply concerns is one of the main factors considered in the design of the Mainnet token model. Furthermore, an undefined and unpredictable total supply makes it difficult to plan for the network’s overall tokenomics, because the community as a collective and the ecosystem itself need to use some Pi for purposes that benefit the community and the ecosystem as a whole, not just for individual mining rewards, as proven in almost all other blockchain networks. A clear allocation for such collective community purposes needs to be defined. Therefore, considering the current network size of over 30 million Pioneers and the expected transaction volume and activity in the future, the Mainnet supply model will have a clear maximum supply of 100 billion Pi, which removes concerns about supply unpredictability while enabling continued growth and incentives for new contributions.

The supply distribution respects the original distribution principles in the March 14, 2019 white paper – the Pi community holds 80% and the Pi Core Team holds 20% of the total circulating supply of Pi, regardless of how much circulating supply exists in the Pi Network at any given time. Thus, with a maximum supply of 100 billion Pi, the community will eventually receive 80 billion Pi and the Core Team will eventually receive 20 billion Pi. The following pie chart shows the overall allocation. The Core Team’s allocation will be unlocked at the same pace as the community mines more Pi. This means that if the community has circulated a portion of its allocation (e.g., 25%), the Core Team’s allocation will only unlock a proportional amount (25% in this example) at most.

Supply

The distribution above represents that Pi Network has no allocation for ICO and has not conducted any kind of crowdfunding sale of Pi. Therefore, any sales or listings impersonating Pi Network or its founders are illegal, unauthorized, and fake. These impersonations have nothing to do with the Pi Core Team. Pioneers should be vigilant against scams and not participate. Pi can be mined freely by contributing to the ecosystem. Furthermore, all mined Pi can be claimed through the Mainnet dashboard from within the Pi app and then transferred to the Pi wallet. Any website asking Pioneers to claim Pi through other means is fake.

The 80% community supply is further divided as follows: 65% is allocated to all past and future Pioneer mining rewards at Mainnet address GBQQRIQKS7XLMWTTRM2EPMTRLPUGQJDLEKCGNDIFGTBZG4GL5CHHJI25, 10% is reserved for supporting community organization and ecosystem building, which will eventually be managed by the Pi Foundation. And 5% is reserved for a liquidity pool to provide liquidity to Pioneers and developers in the Pi ecosystem, with the address GB7HLN74IIY6PENSHBBJXWV6IZQDELTBZNXXORDGTL75O4KC5CUXEV. The table below shows the community supply allocation.

Community Allocation Pi Community Allocation (out of a total budget of 80 billion Pi)

Pre-Mainnet Mining Rewards 20 billion Pi (approx.)

Mainnet Mining Rewards 45 billion Pi (approx.)

Liquidity Pool Reserve 5 billion Pi (approx.)

Foundation Reserve (Grants, Community Events, etc.) 10 billion Pi (approx.)

65 billion Pi is allocated to past and future mining rewards. Regarding past mining rewards, a rough sum of Pi mined by Pioneers so far (pre-Mainnet) is approximately 30 billion Pi. However, excluding Pi mined by fake accounts and depending on the speed and participation in KYC, the estimated pre-Mainnet mined Pi at the start of the Open Network is around 10 billion to 20 billion. The remainder of the 65 billion Pi supply for mining rewards will be distributed to Pioneers through the new Mainnet mining mechanism, which has a conceptual annual supply limit.

Such an annual supply limit is determined based on a decreasing formula. The annual limit may also be calculated on a more granular basis, such as dynamically calculated on a daily or even smaller time epoch basis, depending on factors such as the lockup ratio and the remaining supply in the network at that time. Calculating supply limits based on such granular time epochs helps achieve a better and smoother allocation curve over time. For simplicity here, we will assume the time epoch is one year. In this case, the annual supply limit for the first year of new Mainnet mining will be higher than the second year, the second year higher than the third year, and so on. The formula for the annual supply and these numbers need to be finalized before the Mainnet Open Network period begins, based on how many Pioneers have KYC’d and transferred their mined Pi to the Mainnet.

In the Mainnet, Pioneers can earn rewards by continuously contributing to the network’s growth and security. As explained in the Mining section, the network requires more diverse and detailed contributions regarding app usage, node operation, and Pi lockup, so Pioneer rewards will become even more diverse. Pre-Mainnet Pioneers will continue to contribute to Pi, mine from Mainnet mining rewards, and together with new members joining the network, ensure the network’s growth and longevity.

10 billion Pi is reserved for community organization and ecosystem building, which will be managed by a non-profit foundation in the future. Most decentralized networks and cryptocurrencies, even if decentralized, require an organization to organize the community and set the future direction of the ecosystem, such as Ethereum and Stellar. The future Pi Foundation will (1) plan and host community events such as developer conferences, global online events, and local community meetings, (2) organize volunteers and committee members and pay salaries to dedicated staff focused on community and ecosystem building, (3) collect opinions and feedback from the community, (4) organize future community votes, (5) build the network’s brand and protect its reputation, (6) interact with other entities including governments, traditional banks, and traditional companies on behalf of the network, and (7) fulfill various responsibilities to improve the Pi community and ecosystem. Furthermore, to build a utility-based Pi ecosystem, the foundation will design, create, and implement various community developer programs to support community developers in the form of grants, incubation, partnerships, etc.

5 billion Pi is reserved for a liquidity pool to provide liquidity to all ecosystem participants, including Pioneers and Pi application developers. Liquidity is key for an ecosystem to be viable, active, and healthy. If businesses or individuals want to participate in ecosystem activities (e.g., selling or buying goods and services with Pi), timely access to Pi is needed. Without liquidity, there is no healthy flow of Pi in the ecosystem, and therefore it harms utility creation.

As explained in the Roadmap chapter, one of the advantages of the Mainnet Enclosed Network period is that it allows for calibration of the token model based on the results of the initial Mainnet, if any. Therefore, fine-tuning of the token model will occur before the Open Network period begins. Furthermore, in the future, for the health of the network and ecosystem, we may face issues such as whether inflation is needed after the distribution of 100 billion Pi is complete. Inflation may be necessary for further incentives for contributions through more mining rewards, compensating for loss of Pi from circulation due to accidents or deaths, improving liquidity, mitigating hoarding that hinders usage and utility creation, etc. In such cases, the foundation and its expert committee will organize the community and guide it to reach a conclusion on this issue in a decentralized manner.

Mining Mechanism

Pi Network’s mining mechanism has allowed Pioneers to contribute to the network’s growth, distribution, and security and be rewarded meritocratically with Pi. The pre-Mainnet mining mechanism has helped the network achieve tremendous growth with over 30 million engaged members, a widely distributed currency and testnet, and a trust graph of aggregated security circles that feeds into the Pi blockchain’s consensus algorithm.

Looking ahead to the Mainnet phase, for Pi Network to become a true economy, further contributions and a more diverse range of contributions from all members are needed, and its growth and inclusion must continue. In the Mainnet phase, in addition to growth, inclusion, and security, we aim to further achieve decentralization, utility, stability, and longevity. These goals can only be achieved through the collective efforts of all Pioneers participating in the network. Therefore, the new Pi mining mechanism is designed to achieve these goals by incentivizing all Pioneers to make diverse contributions to the network, based on the same meritocratic principles. Below, we will first describe the pre-Mainnet mining method, and then explain the changes in the Mainnet method.

Pre-Mainnet Method

The pre-Mainnet mining method determined the amount of Pi mined per hour by Pioneers on a meritocratic basis. Pioneers who actively mined received at least the minimum rate and could also earn rewards for their contributions to network security and growth. The Pi mined per hour by a Pioneer is determined by the following formula:

M = I(B, S) + E(I), where M is the total Pioneer mining rate.

I is the individual Pioneer base mining rate.

B is the system-wide base mining rate.

S is the Security Circle reward, a component of the individual Pioneer’s base mining rate from valid Security Circle connections.

E is the Referral Team reward from valid Referral Team members.

The system-wide base mining rate B starts at 3.1415926 Pi/h, beginning with 1,000 Pioneers, and halves every time the size of the network of engaged Pioneers grows tenfold. As shown below, there have been 5 halving events so far.

Engaged Pioneers Milestone Value of B (in Pi/hr, rounded to 2 decimal places) Value of I (in Pi/hr, rounded to 2 decimal places) Value in a complete Security Circle state (in Pi/hr, rounded to 2 decimal places)

< 1,000 3.14 6.28

1,000 1.57 3.14

10,000 0.78 1.57

100,000 0.39 0.78

1,000,000 0.19 0.39

10,000,000 0.10 0.19

Where

i(b,s) = b + s(b)

S(B) = 0.2 – min(Sc,5) – B, where

Sc is the number of valid Security Circle connections.

E(I) = Ec – I(B,S) – 0.25, where Ec is the number of valid Referral Circle members.

Ec is the number of valid Referral Team members mining concurrently.

The mining formula can also be written as a multiple of B:

M = I(B,S) + E(I)

M = [B + S(B)] + [Ec – I(B,S) – 0.25], or

M = [B + {0.2 – min(Sc,5) – B}] + [Ec – 0.25 – {B + {0.2 – min(Sc,5) – B}}], or

M = B – [1 + {0.2 – min(Sc,5)} + {Ec – 0.25 – {1 + 0.2 – min(Sc,5)}} ], or

M = B – [(1 + Ec – 0.25) – {1 + 0.2 – min(Sc,5)} ].

Pre-Mainnet System-Wide Base Mining Rate

All active Pioneers received at least the system-wide base mining rate (B). That is, if Sc=0 and Ec=0 in the mining formula above, M=B. In any case, the Pioneer’s mining rate is a multiple of the system-wide base mining rate. The value of B was predetermined before Mainnet and only changed 5 times as shown in the table above. The maximum supply was undetermined due to the dynamic progression of the pre-Mainnet mining mechanism (e.g., network size and the speed at which the network reached the next halving event). However, as explained in the next section, the value of B in the Mainnet is calculated in real-time and dynamically adjusted based on the total annual Pi supply and the total mining factors of all Pioneers. The supply of Pi in the Mainnet is finite.

Security Circle Rewards

Pi’s consensus algorithm relies on a global trust graph aggregated from the millions of security circles held by individual Pioneers. Therefore, Pioneers can earn additional rewards of up to 5 Pi per hour for each new connection added to their Security Circle. Security Circles are central to the security of the Pi blockchain, and Security Circle rewards increased the total Pioneer mining rate in two ways:

By directly adding to the individual Pioneer’s base mining rate (I), and

By increasing the Referral Team reward, if any.

In fact, having 5 or more connections in a Security Circle doubled the individual mining rate and the Referral Team reward.

Referral Rewards

Pioneers can also invite others to the Pi Network to form a Referral Team. The inviter and the invited person can equally share the bonus reward from the referred team. Pioneers could increase their hourly mining rate by having referred members mining concurrently. This Referral Team reward is a recognition of the Pioneer’s contribution to network growth and Pi token distribution.

Mainnet Mining Method

The goals of the Mainnet phase are to further advance decentralization and utility, ensure stability and longevity, and maintain growth and security. The new formula written below is designed to achieve these Mainnet goals by incentivizing a more diverse range of Pioneer contributions while maintaining network security and growth. As before, it is meritocratic and expressed as the rate at which Pioneers mine Pi per hour.

M = I(B,L,S) + E(I) + N(I) + A(I) + X(B), where

M is the total Pioneer mining rate.

I is the individual Pioneer base mining rate.

B is the system-wide base mining rate (adjusted based on the pool of Pi available for distribution in a given period).

L is the Lockup reward, a new addition to the Pioneer’s base mining rate.

S is the Security Circle reward, which, similar to the pre-Mainnet mining formula, is a component of the Pioneer base mining rate obtained from valid Security Circle connections.

E is the Referral Team reward from valid Referral Team members, similar to the pre-Mainnet mining formula.

N is the Node reward.

A is the Pi App Usage reward, and

X is a new type of contribution needed for the future network ecosystem, which will be determined later, and is also designed as a multiple of B.

That is, S and E remain unchanged from the pre-Mainnet mining formula, and new rewards such as L, N, and A are added to the current formula. This means that while the rewards for growth through E and security through S remain, incentives for Pioneer contributions such as Node operation for decentralization through N, app usage for utility creation through A, and lockup for stability, especially in the early stages, through L are added. B will continue to exist long-term with an annual cap to maintain scarcity and sustain network growth. In fact, all rewards can be expressed in terms of B as follows:

Where

i(b,l,s) = b + s(b) + l(b)

S(B) = 0.2 – min(Sc,5) – B, where

Sc is the number of valid Security Circle connections.

E(I) = Ec – 0.25 – I(B,L,S), where

Ec is the number of valid Referral Team members.

L(B) = Lt – Lp – log(N) – B, where

Lt is the multiplier corresponding to the lockup duration.

Lp is the percentage of Pi mined by the Pioneer on Mainnet that is locked up, up to a maximum of 200%.

N is the total number of Pioneer mining sessions conducted before the current mining session.

N(I) = node_factor – tuning_factor – I, where

Node_factor = Percent_uptime_last_1_days – (Uptime_factor + Port_open_factor + CPU_factor), where it is expressed by the following formula:

Uptime_factor = (Percent_uptime_last_90_days + 1.5*Percent_uptime_last_360_days(360-90) + 2* Percent_uptime_last_2_years + 3*Percent_uptime_last_10_years).

Port_open_factor = 1 + percent_ports_open_last_90_days + 1.5*percent_ports_open_last_360_days + 2* percent_ports_open_last_2_years + 3* percent_ports_open_last_10_years,

CPU_factor = (1 + avg_CPU_count_last_90_days + 1.5*avg_CPU_count_last_360_days + 2* avg_CPU_count_last_2_years + 3*avg_CPU_count_last_10_years)/4.

Percent_uptime_last_*_days/years is the percentage of the last * period that the individual Node was alive and accessible from the network.

percent_ports_open_last_*_days/years is the percentage of the most recent * period that the individual Node’s ports were open for connection to the network.

 

avg_CPU_count_last_*_days/years is the average CPU provided by the individual Node to the network during the most recent * period. tuning_factor is a statistical factor that normalizes node_factor to a value between 0 and 10.

Node rewards depend on the Uptime factor, Port Open factor, CPU factor, and Tuning factor. A Node’s Uptime factor for a given period is the percentage of time the Node was active during that period. For example, if the Uptime factor yesterday was 25%, it means the Node was running and accessible for a total of 6 hours out of 24 hours yesterday. The Pi Node software tracks the time a specific Node was active. From the Open Network phase, only Nodes that are functionally operating at a given time will be considered active. This is a proxy for Node reliability. However, for historical data related to mining rewards, a Node is considered active if the Node app is open and connected to the internet, even if the Node is not functionally operating. This exemption for past performance is a recognition that community Node operators running the Testnet have provided the network with important data and infrastructure enabling multiple iterations of the Node software and Testnet, and that Node malfunction was not always the Node operator’s responsibility.

A Node’s Port Open factor for a given period is the percentage of time that the Node’s specific ports were detected as open for connection from the internet during that period. Pi Nodes use ports 31400-31409, allowing other Nodes to reach them through these ports and the network IP address. Nodes with open ports can respond to communications initiated by other Nodes. Nodes with closed ports cannot receive such communications from other Nodes and can only initiate communications. Pi’s consensus protocol relies on Nodes sending a series of messages to each other. Therefore, Nodes with open ports are essential for the operation of the Pi blockchain and are valuable for increasing mining rewards. In fact, the network aims for at least 1/8 of Nodes to have open ports, and having open ports is one of the prerequisites for being a Super Node.

A Node’s CPU factor for a given period is the average number of CPU cores/threads available on the computer during that period. A higher CPU factor prepares the blockchain to handle more transactions in the future for scalability, e.g., more transactions per block or more transactions per second. The Pi blockchain is not an energy or resource-intensive blockchain. The network is initially set to operate with one new block of up to 1,000 transactions (T) approximately every 5 seconds. Therefore, the network can effectively handle approximately 200 transactions per second (TPS), or about 17 million T per day. If the blockchain becomes congested in the future, this limit can be increased to 2000 TPS (~170 million T/day) by increasing the number of transactions per block from 1,000 to 10,000. The higher the CPU provided by Pi Nodes, the more room there is for the network to grow and scale up further in the future. Furthermore, higher CPU on Pi Nodes allows for building new P2P Node-based applications on the Pi Network. Such services can further reward contributing Nodes with additional Pi paid by the clients of the service.

Finally, the Tuning factor normalizes the Node reward to a value between 0 and 10. This is intended to make the Node reward comparable to other types of mining rewards that recognize other contributions to the Pi Network. During the Enclosed Mainnet phase (explained in the Roadmap section), the Node reward formula is expected to be iterated upon. For example, using logarithmic or root functions might eliminate the need for a tuning factor.

It is important for the health of the blockchain that reliable Nodes operate predictably over the long term. This is not a one-time contribution. Therefore, the Uptime factor, Port Open factor, and CPU factor are all calculated over various periods, and values from more recent periods are weighted more heavily than those from the same length of time in the more distant past. However, note that Node rewards are a multiple of the Uptime factor from the previous mining session. Therefore, a Pioneer will not receive Node rewards in a given mining session if their Node was not active for the entire duration of the immediately preceding calendar day. Similar to App Usage rewards, there are no passive rewards based solely on past contributions as a Node operator. This also means that if the uptime on the previous day was low (even if the Node was active for part of the day), the Node reward for that day will be significantly reduced, even with high past Node contributions.

Impact of KYC on Mainnet Rewards

Pioneers have a 6-month grace period to complete KYC. After that, Pioneers will lose all Pi mined within the 6-month grace period and will not be able to transfer the lost Pi to Mainnet. The retention of Pi mined within the 6-month window continues indefinitely until KYC is passed or the KYC policy changes. Note that this KYC window mining framework will only commence when the KYC solution is generally available to all eligible Pioneers in the future, and will be announced to the community in advance. The 6-month limit is not immediately enforced at the Mainnet launch.

Since true human identity is important in our social network-based mining, only Pioneers who pass KYC can migrate their Phone balance to the blockchain. Our goal is to get as many true Pioneers as possible to pass KYC. As further explained below, the rolling 6-month window serves the following important purposes:

Balance giving Pioneers enough time to pass KYC with creating sufficient urgency to pass KYC.

Prevent unverified Pi past the KYC grace period from migrating to Mainnet, and instead release it for mining by other KYC’d Pioneers within the overall Pi supply allocation for Pioneer mining.

Limit KYC spam and abuse (see 30-day delay for new members’ KYC below).

If a Pioneer does not pass KYC in time, the transfer of their balance and the balances of other Pioneers who have them in their Security Circle or Referral Team to Mainnet will be delayed. Without a balance on Mainnet, Pioneers cannot use Pi for transactions in Pi apps, which hinders the growth of the utility-based ecosystem. The 6-month window gives Pioneers a sense of urgency while also providing enough time to recover their mined Pi. The KYC verification process generally considers the likelihood of a Pioneer being a real human based on Pi’s machine automated prediction mechanisms run over the past 3 years. Newly created accounts cannot apply for KYC verification immediately until after 30 days. This prevents abuse of the KYC process by bots and fake accounts and prioritizes KYC verification resources for real human Pioneers.

Finally, Pi lost by Pioneers whose KYC verification is delayed by more than 6 months will not be transferred to Mainnet and will not be counted in the calculation of the system-wide base mining rate (B) beyond the 6-month KYC grace period. Therefore, Pioneers need to claim their Pi in time, otherwise the lost Pi will be reallocated to B for mining in the same year by other verified Pioneers who can fully contribute to the network.

Roadmap

Pi Network is unique in its technical and ecological design and the importance of community input in its development. This uniqueness is maximized by a thoughtful and iterative approach that allows for community feedback, testing of products, features, and user experience, and phases defined by milestones. Development has three phases: (1) Beta, (2) Testnet, and (3) Mainnet.

Phase 1: Beta

In December 2018, we released the mobile app on the iOS App store as an alpha prototype with initial Pioneers. On Pi Day, March 14, 2019, the original Pi white paper was published, marking the official launch of the Pi network. In this phase, our app allowed Pioneers to mine Pi by contributing to the future growth and security of the Pi blockchain. Since the ultimate goal was to launch the Mainnet and build an ecosystem around the Pi platform, the Pi app running on centralized Pi servers allowed mobile phone users (Pioneers) to contribute their security circles, which collectively built the trust graph needed for the Pi blockchain’s consensus algorithm, and in return, Pioneers received mining rewards. Furthermore, the centralized phase allowed the network to grow, the community to form, and the Pi token to become accessible and widely distributed. This phase also allowed for iteration on many technical features and Pioneer experiences by leveraging community input throughout the development process.

Key achievements during the Beta period include:

The mobile app “Pi Network” was listed and became accessible on the iOS App Store and Google Playstore.

The Pi Network grew from 0 to over 3.5 million Pioneers.

The Pi Network community actively engaged with the project through interactions on the app’s home screen and the chat app.

Pi Network was deployed in 233 countries and regions worldwide.

Phase 2: Testnet

This phase began on March 14, 2020, and enabled a live Testnet with decentralized Nodes from around the world as another important preparation for the transition to a decentralized blockchain. The Pi Network Node software allowed individual computers to support running the Pi Testnet using Test-Pi coins. Test-Pi is only available for testing purposes and is not related to the Pioneer’s account balance on the Pi app. The Pi Testnet has reached over 10,000 fully functional community Nodes and over 100,000 daily active waiting Nodes, and is expected to continue to exist for testing purposes during the Mainnet phase, as explained in a later section.

The Pi Testnet allows for testing blockchain connectivity, performance, security, and scalability, and enables Pi app developers to develop Pi apps before deploying them to Mainnet. During the Testnet phase, three main strategies were adopted: (1) decentralization through Testnet Nodes, (2) growth through the main Pi mobile mining app, and (3) utility creation through the Pi app platform on the Pi Browser. The Testnet ran in parallel with the Phase 1 Pi mobile mining app, allowing decentralized community Nodes to come online and prepare for Mainnet. In particular, Testnet Nodes helped evaluate blockchain performance, security, and scalability. It also helped Pi app developers test their apps against the Pi blockchain. At the same time, the Pi mobile mining app onboarded millions of Pioneers, built the community, and continued to contribute to blockchain security. The Pi Browser, along with the Pi SDK, enabled the community to create utility and develop the Pi ecosystem.

Significant achievements during the Testnet phase include:

Many versions of the Node software were released.

The Pi platform was released with key components of the ecosystem infrastructure: Wallet, Browser, Brainstorm, and Developer Tools.

A pilot version of the KYC app was introduced in the Pi Browser.

The project hosted the first-ever global online hackathon with thousands of participants from the Pioneer community.

The Pi Network grew to over 30 million Pioneers, with over 10,000 functional community Nodes and over 100,000 Nodes actively waiting daily, from 0.

Pi Network also spread to most countries and regions worldwide.

Phase 3: Mainnet

In December 2021, the Pi blockchain Mainnet will go live. During this period, the migration of Pioneer balances from mobile accounts to Mainnet will begin. Prior to the balance migration to Mainnet, Pioneers will undergo KYC verification. To allow millions of Pioneers to successfully pass KYC verification, create utility in the Pi ecosystem, and continue iterating on our technology and ecosystem design, the Mainnet will have two periods:

First, a firewall-protected Mainnet (Enclosed Network).

And then, an open Mainnet (Open Network).

Enclosed Network Period

This period starts in December 2021. The Enclosed Network period means that the Mainnet is live, but a firewall is in place to prevent unwanted external connections. Pioneers will have time to complete KYC and migrate their Pi to the live Mainnet blockchain. Balances migrated to Mainnet can be used, at the Pioneer’s discretion, for purchasing goods and services in Pi apps, transferring to other Pioneers, or locking up for a certain period for a higher mining rate. KYC’d Pioneers can freely use their Pi on the Mainnet within the enclosed environment of the Pi Network. However, connections between the Pi blockchain and other blockchains are not allowed during this period.

Benefits of the Two-Phase Mainnet

Having an intermediate enclosed period before the full opening of the Mainnet has multiple benefits. This approach allows time for:

Millions of Pioneers worldwide to pass KYC.

More Pi apps to be built and deployed, creating and allowing for more utility to be used.

Migrating Pi Apps deployed on the Testnet to the Mainnet.

Iterating on Mainnet and ecosystem modifications and adjustments before the Open Network.

The Enclosed Network period allows time for millions of Pioneers to complete KYC and migrate their Pi to Mainnet. Only a small fraction of Pioneers were able to complete KYC at the time of the Mainnet launch. Over the coming months, we will roll out the KYC solution to more Pioneers and assist them in completing KYC. If we had transitioned directly from Testnet to Open Network, Pioneers who were able to complete KYC earlier than others would be able to use Pi outside the Pi platform, while Pioneers still waiting to complete KYC would not yet have this privilege. The speed at which Pioneers worldwide can complete KYC depends on the speed at which each local community provides KYC validators and the speed at which each Pioneer participates in KYC.

Having an Enclosed Network period creates time for millions of Pioneers to complete KYC and transfer their Pi to Mainnet. This ensures that all Pioneers who are willing and able to complete KYC within a reasonable timeframe can use their Pi outside the Pi platform at the same time. Given that external connections between the Pi blockchain and other blockchains or systems are not allowed during the Enclosed Network period, this further allows Pioneers to focus on migrating to Mainnet without affecting anything outside the Pi blockchain.

This period also allows the community to focus on utility creation and ecosystem bootstrapping without external distractions. Consistent with Pi Network’s vision of enabling a utility-based ecosystem, apps will be deployed to Mainnet and can create utility for Pioneers. Pi apps are expected to be able to switch from Testnet to Mainnet-to-production mode for actual Pi transactions. At this time, KYC’d Pioneers can spend Pi in Pi apps, boosting utility creation and bootstrapping the Pi ecosystem before the Open Network. This gradual and cautious transition to the Open Network helps apps and the Pi Network discover and resolve market and technical glitches. Thus, the Enclosed Network period is consistent with Pi’s vision of a utility-based ecosystem and its iterative philosophy.

Furthermore, the Enclosed Network, unlike the Testnet, allows the Mainnet to operate with production data and real Pi. Data collected in the Enclosed Network will help calibrate and fine-tune any settings and formulas as needed to ensure the stability and success of the Open Network.

KYC Verification and Mainnet Balance Migration

“KYC (Know Your Customer/Client) is the process of verifying identity to distinguish between genuine and fake accounts. Pi Network’s vision is to build an inclusive and most widely distributed token and ecosystem for all Pioneers. Pi Network’s mining mechanism is social network-based, and the mining rate has halved 5 times so far as the social network size has grown to 1K, 10K, 100K, 1M, 10M+ engaged members. Therefore, Pi has a strict policy of one person, one account. This requires high accuracy in verifying that members in the network are real humans and prevents individuals from unfairly accumulating Pi by creating fake accounts. The outcome of a Pioneer’s KYC depends not only on identity verification but also on name matching with the Pi account and checking against government sanction lists, etc. KYC helps ensure the network’s true human identity and comply with Anti-Money Laundering (AML) and counter-terrorism regulations.

As we stated at the network’s inception, fake Pi accounts and script mining are strictly prohibited to ensure true human identity. These accounts will be invalidated and cannot migrate to Mainnet. Over the past 3 years, multiple technical mechanisms have been implemented to identify bots and fake accounts. For accounts identified by Pi’s algorithms as likely fake, it is important for them to prove otherwise. These identified fake accounts will either be invalidated or undergo a more stringent review and appeal process. Allocation of KYC slots is prioritized for accounts that are highly likely to be held by real humans.

Only accounts whose identity has been verified are allowed to migrate to Mainnet, and only Pi balances attributable to verified accounts are allowed to migrate to the Mainnet balance. When Pioneers and their Referral Team and Security Circle members pass KYC, it determines whether, when, and to what extent a Pioneer can migrate their balance. Below is a hypothetical example to illustrate how a Pioneer’s KYC verification affects their balance in the migration to Mainnet.

For simplicity, we define the different concepts of Pi balance as follows:

Mobile Balance: The Pi balance displayed in the Pioneer’s account in the Pi mobile app.

Transferable Balance: The balance that is allowed to be migrated to Mainnet because the Pioneer and certain associated individuals in their Referral Team and Security Circle have passed KYC.

Mainnet Balance: The balance that the Pioneer has migrated to Mainnet and has been transferred.

Assume individual A is the owner of a Pi account and wants to transfer their Mobile Balance. Pioneer A will only be able to migrate any of their Mobile Balance to Mainnet when their identity is verified, i.e., when they pass KYC. Assume this individual’s Referral Team includes individuals B, C, D, and E, and their Security Circle includes individuals D, E, F, and G. For now, only individuals A, B, D, and F have completed KYC verification.

In this example setting,

A is a mining Pioneer who has passed KYC.

B, C, D, and E are in A’s Referral Team.

D, E, F, and G are in A’s Security Circle.

A, B, D, and F have passed KYC.

Here, A’s Transferable Balance is the sum of the following three components:

Pioneer Reward: Pi mined in all mining sessions based on A’s Pioneer status.

Contributor Reward: The amount contributed to A’s mining rate in all mining sessions by D and F as contributors.

Ambassador Reward: The mining bonus in all mining sessions when B and D, who are referrers, mined in the same sessions as A.

During the Enclosed Mainnet period, Mobile Balance that has not become Transferable Balance will remain in the Mobile mining app until the associated Pioneers in the Referral Team and Security Circle pass KYC and the corresponding amount becomes transferable to Mainnet. When members of Pioneer A’s Referral Team and Security Circle (such as C, E, and G) pass KYC, more of A’s mobile balance will become transferable to Mainnet, eventually becoming A’s Mainnet balance. If these accounts do not pass KYC, the balances attributable to these un-KYC’d accounts will expire on a certain date when the entire network has had sufficient time to KYC. Accounts that do not pass KYC will not be transferred to Mainnet and will be available for mining by other KYC’d Pioneers. The overall Pi supply limit allocated for Pioneer mining is explained in the Pi Supply section.

Restrictions in the Enclosed Network

Transactions between Pi apps and Pioneers, and transactions between Pioneers are possible within the Pi Network, but the following restrictions will be in place in the Enclosed Network. The restrictions at this stage are to enhance the network’s enclosed nature.

No connections between Pi and other blockchains or crypto exchanges.

The Mainnet can only be accessed through the Pi Wallet and Pi apps in the Pi Browser.

The Mainnet blockchain can be accessed from any computer on the internet, but only through a firewall to enforce the rules above.

Only Core Team Nodes will be present on the Mainnet to ensure the firewall is always in place.

The Enclosed Network supports economic activity and growth within the Pi ecosystem. Therefore, transactions between Pioneers are possible through the Pi Wallet, as KYC’d Pioneers can use the Pi Wallet to make Pi transactions. Pioneers can also spend Pi in Pi apps on the Pi Browser, which can access the Mainnet through the Pi Apps SDK and Pi Blockchain API. During the Enclosed Network period, apps on the Pi Browser can only interact with the Mainnet using Pi Blockchain APIs that are whitelisted by the firewall.

For transactions between Pioneers, between Pioneers and apps, and between apps and Pioneers, the following uses are allowed:

Exchange of Pi for goods and services through Pi apps.

Exchange of Pi for goods and services between Pioneers.

The following uses are prohibited:

Exchange of Pi for fiat currency.

Exchange of Pi for other cryptocurrencies.

Exchanging Pi for other cryptocurrencies.

We plan to enforce the above restrictions by adding a firewall to the Mainnet and running only Mainnet Nodes during this interim period. Community Nodes will continue to run on the Testnet during the Enclosed Network period. We will continue to implement interface and other changes to the Nodes in preparation for the Open Network period when community Nodes will start running on the Mainnet. In the next Open Network period, the constraints on the network being enclosed will be relaxed.

Open Network Period

Depending on the maturity of the Enclosed Network economy and the progress of KYC, this period may start on Pi Day (March 14, 2022), Pi2 Day (June 28, 2022), or later. The Open Network period means that the firewall from the Enclosed Network period will be removed, allowing any external connections, including to other networks, wallets, and anyone who wants to connect to the Pi Mainnet. API calls will not be protected by a firewall, and Pioneers will be able to run their own Pi Nodes and API services. Pioneers will have connectivity with other blockchains. Community Nodes can also run the Mainnet.