There is no cap on the amount of Pyrite that can exist at all. Even if someone is hoarding it, it doesn't affect how much can be mined.
"No cap on the max amount" probably means "No hard cap". This is a good news.
Okay, this means there is a different system to control the amount in circulation. Why i think it's not simply effect of overmining an area while the demand is high?
Because, let's turn it around. What happens when a substantial amount of any resource is used up?
This is where the existence of a balancing system shows most clearly. Best way to test it - planets with a low population.
1st example: Cyrene, big Dusters. This is a mob that drops shitloads of MF chips (more than any other mob i know). Every global and mini is a guaranteed MF chip.
If u keep hunting for several hours nonstop, after a while they start dropping less. And less. And even less. Until finally u reach the point when u rarely get any. TT all the chips, see what happens? MF chips start raining again.
2nd example: Cyrene, Tanhok Amber. That's supposed to be very rare resource (meaning, the system tries to keep the total amount in game on a very low level).
There was a time when ~10 people in different time zones hunted extensively trying to loot it. After several weeks there was 1 (maybe 2?) lucky hit(s). One of the guys who got the Amber used it up and went hunting right after. He got another Tanhok Amber in less than 60 min. A bit too much for a coincidence, doncha think?
This leads me to believe droprate is connected to the amount in circulation. How exactly, we can't tell.
Charlie's remark reminds me one old story i've heard.
I've met an old PE miner in another game. We used to talk alot, about games we had played mostly. Once he described in detail how he used to hoard certain resources to make them drop less, thus driving the market prices up and made good profit this way.
Then at some point MA changed the way the system works and he couldn't do that any more. I don't remember what was the time frame, could be 2004 or 2005. Suppose that was the point when hard caps were replaced by... something a bit more sophisticated.
There's ppl who know a bit more about this "something a bit more sophisticated", but they won't speak...