KYC Verification and Mainnet Balance Transfer
“Know Your Customer/Client” (KYC) is a process that verifies identification to distinguish genuine accounts from fake ones. The vision of Pi Network is to build an inclusive and the most widely distributed token and ecosystem for all Pioneers. The mining mechanism of Pi Network is social network-based, and the mining rate has halved 5 times so far as the social network size grew to over 1K, 10K, 100K, 1M, and 10M engaged members. Therefore, Pi has a strict policy of one account per person. This requires a high degree of accuracy to establish that members in the network are genuine human beings, preventing individuals from being able to unfairly hoard Pi by creating fake accounts. Pioneers’ KYC results will depend on not only identity verification, but also their name matching with the Pi account and screening against government sanction list. KYC, thus, helps ensure
- the true humanness of the network and
- compliance with the Anti-Money Laundering (AML) and anti-terrorism regulations.
As communicated at the founding of the network, to ensure true humanness, fake Pi accounts and scripted mining are strictly prohibited. These accounts will be disabled, and will not be able to migrate to Mainnet. Over the past three years, multiple technical mechanisms have been implemented to identify bots and fake accounts. For the accounts identified as highly likely to be fake by Pi’s algorithm, the weight is on these accounts to prove otherwise. These identified fake accounts will either be disabled or go through a much more rigorous review and appeal process. The allocation of KYC slots will be prioritized for accounts with a high likelihood of being true human holders.
Only the accounts with verified identities will be allowed to transition to Mainnet, and only the Pi balances attributable to identity-verified accounts will be allowed to transfer to the Mainnet balance. When a Pioneer and their referral team and security circle members pass the KYC determines if and when, and to what extent, a Pioneer can transfer their balances. Below is a hypothetical example to illustrate how the KYC verification of Pioneers affects their balances in migration to the Mainnet.
For simplicity, we define different concepts of Pi balances as follows:
- Mobile Balance: The Pi balance currently shown in a Pioneer’s account in the Pi mobile app
- Transferable Balance: The balance that has been allowed to be transferred to the Mainnet because the Pioneer and their specific associated individuals in the referral teams and security circles have passed KYC
- Mainnet balance: The balance that has been migrated and transferred by the Pioneer to the Mainnet
In this example setup:
- A is a mining Pioneer who has passed KYC.
- B, C, D, E are in the Referral Team of A.
- D, E, F, G are in the Security Circle of A.
- A, B, D, and F have passed KYC.
Here, A’s Transferable Balance is the sum of the following three components:
- Pioneer Rewards: Pi mined based on A’s Pioneer status across all mining sessions
- Contributor Rewards: D and F’s contribution to A's mining rate as Contributors in all mining sessions
- Ambassador Rewards: Mining bonuses from all mining sessions when B and D as referral team members mined during the same session as A mined
As more of Pioneer A’s referral team and security circle members (i.e., C, E, and G) pass KYC, more portions of A’s Mobile Balance will become Transferable Balance—ready for A to migrate to the Mainnet, and ultimately become A’s Mainnet Balance.
During the Enclosed Mainnet period, any 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 circles pass KYC and the corresponding amount becomes transferable to Mainnet. In the case of the above example of Pioneer A, the balance contribution by C, E, and G will remain as Mobile Balance for A in the mining app waiting for them to pass KYC in order for such balance to become transferable. If such associated accounts never pass KYC, the balance attributed to these non-KYC’ed accounts will expire at a certain date which will have allowed enough time for the whole network to KYC. The unclaimed balances due to lack of KYC will be discarded by not being transferred to the Mainnet at all, instead freeing it up for mining by other KYC’ed Pioneers within the allocated Pi overall supply limit for Pioneer mining as explained in the Pi Supply section.