PRV serves as a network incentive for Incognito. It rewards validators for sustaining the network, and has total supply of 100 million, which will be systematically mined over a period of 40 years.
The first year of that period is now over.
The end of the year comes with a shift in the validator ecosystem. As outlined in the whitepaper, each year, the block reward for validators decreases by 9%.
At the end of the first year, exactly 8,751,970 PRV had been mined by validators. Added to the 5 million pre-mined and locked PRV purchased by the core team to self-fund the project, that brings the total locked and available supply of PRV to 13,751,970 at the time of the reduction.
Now that the reduction has occurred, validators will notice that their block rewards are just over 9.9 PRV. This rate will last until the next reduction.
When did rewards reduce?
The block reward reduction occurred on block height 788940, which was time stamped at 2020/10/31 11:12 PM Pacific Time, according to the Network Explorer. The next 9% reward reduction will occur in one year.
That just so happened to be Halloween night in the US. . . Spooky
What does this mean?
PRV is a coin unlike any other, with utility that far outpaces that of other privacy coins. Rather than just enable you to spend one coin anonymously, PRV enables privacy for any and all of your favorite currencies.
It rewards a network of validators, and incentivizes an active community of builders. It can be invested, it can be spent, and it can be traded. And beyond financial services, PRV can be used as a building block for pApps, bringing privacy to tech across social networking, gaming, and any other application you can dream of. The yearly reduction serves as one of the pillars upholding the expanding ecosystem built on PRV.
Different people will have varying opinions on the effects of the reduction (just look at conversations around the Bitcoin Halvening). But at its core, the block reward reduction serves to hold PRV to a stable economic model that can keep the network alive for decades to come.
However, if you’ve put off becoming a validator, the reduction can serve to remind you that the early bird gets the worm, so don’t delay!
How do you feel about the reduction? “Hash” it out in the comments!
