A practical guide for the innovative investor
Staking Coins is a magical experience. It literally prints money directly into your wallet.
Besides it helps to validate transactions, secure the network and keeps it decentralized.
We believe Proof of Stake and similar consensus models will become a standard for most public blockchain infrastructures.
To evaluate the passive income opportunities, it is substantial to understand the unique principles of each staking asset.
This week we are talking about Pivx. We will go through the basics, core principles, explain how to stake Pivx, how much to earn with it and give you some insider tips in the end.
What is PIVX?
PIVX stands for Private Instant Verified Transaction. The currencies main focus lies on privacy through the Zerocoin Protocol, instant verified transactions through masternodes and on community governance with 16.66% of the block rewards going towards budget proposals.
The project is open-source, self-funded and self-governed. It fairly launched without ICO and all premined coins have publicly been burnt.
Who is the Team behind PIVX?
James Burden (known as s3v3n h4cks) initiated the launch of PIVX together with another former Dash community member known as “Coin Server”.
PIVX is organized in a complete decentralized manner and everybody is welcome to contribute. The core contributors shown on their website include 20 people with a wide variety of expertise. There are many more contributors not shown on the website. The best way to get involved is by joining their Discord Server.
How was PIVX launched?
PIVX was launched on the 31th January 2016 initially called Darknet. The codebase was forked from Dash and 60,000 coins were premined to run 6 initial masternodes. The premined coins have been destroyed later in July 2016 when it fully switched to the Proof of Stake consensus mechanism. The rebranding from DarkNet to Pivx was done in January 2017.
PIVX core principles
Since October 2017 Pivx facilitates the ZeroCoin protocol, which has been proposed by Matthew D. Green and his graduates in May 2013.
It provides a protocol-level coin mixing service using zero knowledge proofs to sever the link between the sender and the receiver with 100% anonymity and untraceability. The coins being sent as zerocoins are 100% fungible and have no determinable history attached.
ZeroCoin allows direct, anonymous transactions between parties. PIVX ZeroCoins (zPIV) exist alongside the non-anonymous PIVX currency PIV. Each user can convert PIV into zPIV coins. Users can then send zPIV to other users, and split or merge zPIV they own in any way that preserves the total value. Users can also convert zPIV back into PIV, though in principle this is not necessary: all transactions can be made in terms of zPIV.
Masternodes & SwiftX
Masternodes are incentivized nodes that receive rewards based on their availability and their ability to offer network services in a decentralized and trust-less manner.
Masternodes guarantee instant transactions (known as SwiftX transactions) in the network. These transactions are confirmed and spendable almost immediately. There is no need to wait for multiple confirmations in order to be confident in the validity of the transaction. PIVX SwiftX costs 0.01 PIV, and will give 5 confirmations in under 1 second.
As the backbone of SwiftX and other future services they are rewarded at a slightly higher level compared to staking similar amounts. (This is the intention, though might not always be true as you will see further down)
Furthermore they allow the owner to vote on budget and development proposals.
- zDex: In November 2018 the Pivx team announced the launch of a private decentralised cryptocurrency exchange. It will enable traders to transact cryptocurrencies in a private and trusted manner, without any AML/KYC requirements. The exchange infrastructure will be maintained by Masternodes of the Pivx Network.
- ios Wallet: Despite the strong restrictions to launch apps on Apples platform, the Pivx team has managed to launch the first dedicated, private, proof-of-stake wallet in the App Store in January 2019. It supports all the privacy features of Pivx.
- Stealth staking: Pivx is the world´s first currency to allow staking while staying fully anonymous. As announced in May 2018 it has implemented Zerocoin-protocol-enabled Proof of Stake.
First of all there are three ways to earn rewards in PIVX.
- Running a Masternode
- Staking Pivx Coin (PIV)
- Staking Pivx ZeroCoin (zPIV)
Each new block 6 PIV coins are minted, where 1 PIV goes directly into a pool to fund development or other proposals made by the community.
The other 5 PIV are shared between Masternodes & Stakers. The individual reward depends on, if the node, who creates the new block, is staking PIV or staking zPIV.
- If a PIV staker finds a block: 3 PIV to masternodes, 2 PIV to staker
- If a zPIV staker finds a block: 2 PIV to masternodes, 3 zPIV to staker
The reward for staking zPIV is higher in favour to bootstrap the adoption and usage of PIVX ZeroCoins.
Running a PIVX Masternodes requires 10,000 PIV coins. The collateral is locked as long as the masternode is enabled. 10,000 PIV currently account to around $7,600 USD. The node needs to be online 24/7 and run the dedicated node software.
The current annualized masternode yield is 12.56 % and it is expected to receive a reward around every 21 hours.
In the near future masternodes will additionally earn 50% of all trading fees from the zDex and potentially other services.
Staking PIVX Coin (PIV)
Staking PIV does not require any kind of collateral. Anyway it is recommended to stake at least 1000 coins to regularly receive a reward around twice a month.
For staking it is required to run the official pivx wallet on a computer or server, which is constantly online. Once installed simply unlock the wallet and you are ready to stake.
Considering server/hardware cost to keep the staking node running 24/7, staking an amount below 1000 PIV might not be profitable.
The current staking yield is 9.21%, which is based on the current engaged supply of ~34mil. PIV and a 30-day weighted average block time of ~41 seconds
Staking PIVX ZeroCoin (zPIV)
The procedure for staking zPIV is the same as for PIV, just that you have to change your PIV to zPIV before you start staking.
The current yield for stealth staking is 13.87%, which is even higher than the yield for masternodes.
So why should you even run a masternode?
Well, it is true, currently you are better off staking zPIV than running a masternode. Anyway this could change quickly the more people use the stealth staking. Check back at our website to see the changes.
Who receives the transaction fees?
Short answer: No one.
All transaction fees as well as the zPIV minting fees are burnt immediately.
How are the staking/masternode yields determined?
We are dynamically calculating the yields based on the number of active masternodes, number of coins currently staking and number of available zerocoins How many of those zerocoins are staking is extracted from the block rewards. If 3 goes to the staker, then we know the block was found by a zPIV staker. Also we consider the average block time of the last 30 days. There is a proposed block time of 60 seconds, but actually it has been around 41 seconds recently.
- If you don´t have enough coins for a masternodes and want to stake Pivx, it obviously makes more sense to convert the PIV to zPIV, as the individual reward and annual yield is significantly higher.
- Make sure to check our website regularly to see how the yields percentage is changing for each method and which method is the most profitable for you. We are tracking the dynamic yields for all methods based on actual network conditions with an update every 4 hours. We will show all yields and stats in the chart very soon as well.
- The metric “optimal address weight” on our page for pivx tracks the average (of the last 100 blocks) input size of the addressess that found new blocks . Input size simply means the number of coins on this address. Therefore the probability to find a new block via staking was the highest with exactly that input. So if you want to stake more than the “optimal address weight”, it might be more profitable to split the holdings into two addresses and stake with both of them individually.
Note: Please consider “optimal address weight” as beta version. We did not test it. Feel free to let us know your thoughts on this.
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