PIVX (PIVX)

• PIVX is a Proof-of-Stake (PoS) blockchain-based cryptocurrency created in 2016. At its core, it relies on fungibility, transaction privacy, and community governance.

• Initially built on the Zerocoin protocol, PIVX pioneered its staking reward model with a two-tier model featuring both private staking (offering additional financial rewards) along with the regular (public) staking. A second layer masternode network exists, and each masternode requires 10,000 PIVX coins to participate in community governance voting.

• Since January 5th 2020, its Proof of Stake algorithm has been updated (PoS Time Protocol v2) along with new features such as Cold Staking.

• On February 9th 2020, PIVX revealed its new privacy protocol plan, i.e., its custom integration of Sapling, which will replace its now-defunct Zerocoin protocol, scheduled for release in late 2020.

1. What is PIVX?

PIVX, Private Instant Verified Transaction(Tx), is an MIT open-source licensed, decentralized Proof of Stake (PoS) blockchain-based cryptocurrency.

PIVX focuses on transaction privacy, fungibility, community governance, and real-world use.

At its core, PIVX relies on the following key characteristics:

• Dash/Bitcoin core source-code: PIVX was based on Dash’s source-code, itself forked from Bitcoin’s source-code, which has since been enhanced with a customized PoS algorithm and a dedicated privacy protocol.

• Customized Proof of Stake algorithm: it aims to improve both decentralization and energy efficiency, besides the introduction of a community voting governance system, with the sole aim of fulfilling its manifesto to become: . Since its transition from PoW to PoS in August 2016, PIVX has been a blockchain relying on block generation solely from its Proof of Stake consensus algorithm. Block issuances are done by the stakers, i.e., holders of PIVX held in a PIVX wallet.

• Masternode network: PIVX also includes a second-tier masternode network that allows users to set up a specialized full-node wallet if they hold 10,000 PIV as collateral. These masternodes participate in decentralized treasury voting governance, and in return, receive a portion of the block reward (3 PIV vs. 2 PIV for stakers). This system is actively utilized, and many proposals are paid out by the treasury each month in a fully decentralized manner.

Key differentiating features include:

• Private & Public Staking: PIVX uses a customized Proof of Stake model where it allows both hot and cold wallet staking to mint new blocks and earn block rewards while enforcing that masternodes are also paid with every block that is minted. PIVX pioneered in developing the first-ever Zerocoin protocol-based supporting Private Proof of Stake. Previously, a highly customized integration of Zerocoin protocol was used and showcased the skillsets of the PIVX developers from its inception.

• Cold Staking: this newly added function allows coins to be held in one wallet while being delegated for staking by another staking node. This allows the staker wallet to remain online and to perform staking without also having access to spend the coins. Cold Staking increases the security of coins, as they can be safely stored on an offline wallet or a hardware wallet, without the need to abandon staking rewards.

• Sapling as an alternative to the Zerocoin protocol: following the deprecation of Zerocoin protocol (which was explained in-depth in our research article), PIVX has announced a new replacement privacy protocol, set to be released by Q4 2020.

• A foundation serving as a “legal footprint”: PIVX has its own legal footprint with a PIVX Foundation, which supports and funds the project’s development. The PIVX Foundation was launched in 2019, as a sub-fund of the Sustainable Development Goals (SDG) Impact Fund, which is a Public Charity Donor Advised Fund (DAF), and the only DAF in the United States that is independent of a bank, accepts cryptocurrency and is focused on helping humanity attain the United Nations’ SDGs.

2. PIVX’s key features

PIVX differs from other privacy coins based on several of its key features, such as cold staking, a second-tier masternode network, and a dynamic coin issuance system. In addition, the team has been actively working on Sapling, a sK-SNARK privacy solution to replace the Zerocoin protocol.

Cold Staking

With Cold Staking, block producers are still required to keep a node online, but the private keys for the staked coins can be safely stored offline. This is achieved by signing a special "contract" transaction that transfers only the coin's staking rights without transferring the coin's ownership. In comparison, in traditional Proof-of-Stake consensus algorithms, block producers are required to keep the private keys to the staked coins in online nodes.

This allows the coin owner to delegate the coins to a delegated staker node to be able to stake the coins on the owner’s behalf, without giving permission to spend the coins themselves. Also, the block rewards, which are received by the cold staking node, are sent directly to the coin owner’s wallet, leading to further trustless relationships.

More technical info on Cold Staking can be found in the Developer Wiki.

Sapling zK-SNARKs privacy (in development)

In February 2020, PIVX announced its plans to integrate a customized version of Sapling, on the next major 5.0 core wallet scheduled for release in late 2020. This will enable both the public and private transactions on the PIVX Proof of Stake blockchain.

Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKS) is a non-interactivezero-knowledge proof (ZKP)that can be verified without any interaction with the prover. The Sapling Protocol makes use of zk-SNARKs proofs to allow both shielded and unshielded transactions on the blockchain. On the other hand, Groth16, created by Jens Groth, is a SNARK construct created by a distributed multi-party computation setup phase that will be used for the initial setup.

At the time, PIVX was the world’s first full-time Proof of Stake cryptocurrency project to announce the implementation of this highly recognized privacy protocol. It could be the first project to integrate a Sapling-only protocol.

More technical background info can be found in the developer announcement.

Second-tier masternode network

PIVX allows for a specialized full-node wallet that enables a secondary network between them, making them be able to conduct unique tasks that are not possible on the blockchain network or are not feasible to do so.

This specialized mode is called a Masternode, and any user can qualify setting up a masternode by owning 10,000 PIVX coins. This amount is then parked as collateral while the masternode wallet is running, and in return, receives block rewards as an incentive.

PIVX utilizes the masternodes for decentralized governance voting of community proposed budget proposals on how the monthly treasury amount is spent in both the amount and which proposal receives them. More use cases are being researched for future expansion of the network’s usage.

3. Economics and supply distribution

PIVX has a unique dynamic coin supply model, where its coin emission is based on a fixed-amount per-minute block reward minted through Proof of Stake, along with a variable treasury payout each month.

The block reward is fixed at 5 PIV per block, which is split between the “staker” and the selected masternode. The treasury has a maximum of 1 PIV per block, paid out monthly to the voted and passed masternode proposals. So, in total, PIVX has a theoretical maximum emission rate equivalent to 6 PIV per minute, equating to approx. 5.5% per year and decreasing every year.

Although there is no set maximum coin supply, due to all network transaction fees being burnt from the coin supply, the maximum coin supply at any given point in time is governed by how much transactions occur on the network.

Hence, with every block, PIVX never reaches its theoretical max of 6 PIV / minute emission rate due to the burning of fees, which offsets some of its issuance schedule. Worth noting that in a large transaction environment, the actual per-block inflation rate could decrease down to zero or even be negative, i.e., supply reductions.

Maximum Projected Coin Supply is as follows:

• Feb 2020: 62,403,724 PIV

• Feb 2030: 93,939,724 PIV

• Feb 2040: 125,475,724 PIV

While these numbers are theoretical maximums only, the actual coin supply at those times is guaranteed to be lower, owing to fee burns & partial budget generation. As a result, the more people use and transact with PIVX, the rarer it would become thanks to this unique coin emission system.

4. Project Team

PIVX team consists of both masternode proposal voted & funded members, as well as community-backed members who are contributing their time voluntarily. As of March 2020, there are over 10 core members, with more than 30 community members who assist and contribute to many different tasks to ensure the PIVX project and its community is maintained.

For the full list of the team behind PIVX, please visit its official website.

5. Additional resources

• Discord. PIVX. https://discord.pivx.org/

• Facebook. PIVX. https://www.facebook.com/PIVxCrypto/

• GitHub. PIVX Project. https://github.com/PIVX-Project/PIVX

• PIVX. Website. https://pivx.org/

• PIVX. Whitepaper. https://pivx.org/white-papers-2/

• Twitter. PIVX. https://twitter.com/_pivx

• YouTube. PIVX. https://www.youtube.com/channel/UCr4Wk2opstIsUvMOz9quFSg