Understanding PIVX Tokenomics: A Guide for Long-Term Holders

Launched without a pre-mine in 2016, PIVX is an OG cryptocurrency with a consistent development history. This privacy-focused coin features distinctive tokenomics designed for a sustainable equilibrium between inflationary and deflationary forces.

If you’re considering holding PIVX for the long term, this guide will walk you through everything you need to understand about its tokenomics.

Key Elements of the PIVX Network

Dynamic Coin Supply

Unlike other cryptocurrencies that have a fixed maximum supply, PIVX has a dynamic supply model. New PIV coins are generated with each block and distributed as follows — 10 PIV to the Treasury, 6 PIV to Masternodes, and 4 PIV to Stakers.

Transaction fees are burned, serving as a balancing mechanism between inflation and potential deflation. However, it is worth mentioning that the coin burn does little to dampen inflation at the moment since fees on the PIVX blockchain are infinitesimal. This is expected to change as the project rollouts shielded staking and masternode rewards since SHIELDED fees are slightly higher.

Proof of Stake (PoS) Consensus

PIVX utilizes a PoS consensus mechanism, which is more energy-efficient than Proof of Work (PoW). Holders can stake their PIVX to secure the network and earn rewards (currently 13% annually).

Staking provides a direct financial incentive to hold PIVX and contribute to network security. Long-term holders can earn passive income by staking their PIVX. The barrier to entry for staking is low; even holding a small amount of PIVX in a compatible wallet allows participation. Meanwhile, PIVX offers cold staking, which allows users to delegate their staking rights to a separate online node while keeping their coins securely offline. This enhances security for long-term holders.

The frequency of staking rewards depends on the amount of PIVX being staked and the overall network weight (the total amount of PIVX being staked). Although rewards are random, the estimated daily reward for staking 10,000 PIV is approximately 4 PIV.

Masternode Network

A layer of masternodes enhance network stability. Operators are rewarded for their commitment and participate in governance.

Running a PIV masternode requires a collateral of 10,000 PIVX but offers a larger share of the block rewards compared to staking. For holders with a significant amount of PIVX, running a Masternode can be a more lucrative way to earn rewards and actively participate in the governance of the network.

Decentralized Autonomous Organization (DAO)

PIVX is governed by its community through a DAO. Masternode operators can vote on budget proposals, development initiatives, and other important decisions, ensuring the project’s direction is community-driven.

The strong emphasis on decentralized governance means that the future direction of PIVX is in the hands of its community, particularly those who have made a significant long-term investment by running masternodes. This can lead to more aligned and sustainable development.

Inflation Rate

The annual inflation rate of PIVX is dynamic and depends on the block reward, the number of masternodes, and the amount of PIV burned in transaction fees. The current max emission is 20 PIV per minute (shared between stakers, masternodes, and the treasury). This translates to a hypothetical annual inflation of around 11%. But in reality, the inflation rate is a lot lower since half of this amount is used to fund proposals that provide value to the ecosystem. The other half is used to reward stakers and masternodes, adding value to inflation.

Historically, the inflation rate has been relatively low and is designed to gradually decrease over time as network adoption grows and more fees are burned. While there’s no scarcity created by a hard cap, the burning mechanism can lead to a more stable or even deflationary supply in the long run if adoption increases.

Utility and Adoption

There is growing awareness about privacy and surveillance. PIVX’s focus on privacy through its SHIELD protocol provides a unique utility proposition in a growing market concerned with financial privacy. Furthermore, the blockchain offers near-instant transaction confirmations, enhancing the usability of PIVX for everyday transactions.

PIVX can be spent on thousands of gift cards on the PIVCards website. It can also be used for flight and hotel bookings via Travala and in 100s of merchant stores.

Increased adoption and the development of a thriving ecosystem will drive demand for PIVX and positively impact its long-term value.

PIVX. Your Rights. Your Privacy. Your Choice.
To stay on top of PIVX news please visit PIVX.org and Discord.PIVX.org.