Overview to Pi Network

Pi Network was founded by several PhDs from Stanford University in March 2019. The project team aims to enable ordinary users around the world to easily participate in cryptocurrency mining and ecosystem building through an innovative mobile mining model, thereby popularizing blockchain technology.

Image source:https://minepi.com/

Pi Network adopts an innovative consensus algorithm called the Stellar Consensus Protocol (SCP). Unlike traditional cryptocurrencies like Bitcoin, which use the Proof of Work (PoW) mechanism, SCP does not require users to invest large amounts of computational resources and energy for mining. In Pi Network, users only need to download the app on their mobile phones and click once a day to start mining, significantly reducing the cost of participation. This design concept attracted a large number of users to Pi Network in its early stages, especially those interested in cryptocurrencies but lacking professional equipment and technical knowledge.

In 2019, Pi Network launched invitation-based mining globally, entering the Beta testing phase, establishing user communities, and designing and testing the distribution model for PI coins. From 2021 to 2023, it entered the test network phase, running a test network, simulating a real blockchain environment, and the application ecosystem began to develop. PI coins could not yet be traded on external exchanges. In 2024, the mainnet was launched with plans for a fully decentralized mainnet, allowing PI coins to be traded externally, and further expansion of the DApp ecosystem. On February 20, 2025, the network will be listed, enabling external trading and allowing PI to be listed on cryptocurrency exchanges.

Despite Pi Network’s grand vision and extensive user base, it also faces controversies and challenges, such as questions about its business model resembling MLM, delays in launching the mainnet, restricted token circulation, and growing market concerns about its compliance. Additionally, Pi Network must contend with fierce competition in the cryptocurrency market and uncertainties regarding regulatory policies.

PI Coin Economic Model

PI token is the native cryptocurrency of the Pi Network, with a total supply of 100 billion tokens. Of this, 80% (800 billion) is allocated to the community, allowing ordinary users to participate in mining and other activities to earn PI tokens, incentivizing participation and promoting the expansion of the network and ecosystem. The remaining 20% (200 billion) is held by the core team for project development, operations, marketing, technical research, and long-term ecosystem growth, ensuring sustainable development.

The total supply of PI tokens is dynamic and adjusts based on the number of network participants and their mining activity. The supply is divided into three main categories: mining rewards, referral rewards, and developer rewards:

Image source:https://minepi.com/white-paper/

1. Mining Mechanism: In the early stages, users can easily mine PI tokens by downloading the PI Network app on their mobile phones. Unlike traditional mining, this does not require expensive hardware or large energy investments. The initial mining speed is designed to be substantial to attract users and grow the user base quickly. As the user base grows, the mining difficulty adjusts dynamically to avoid excessive issuance of tokens. This mechanism is inspired by the controlled supply of tokens in other cryptocurrencies like Bitcoin, theoretically ensuring a stable long-term supply pace.

2. Social Mining: PI tokens implement a social mining incentive model. Users can increase their mining power by inviting new users to the network. Each successful referral boosts the inviter’s mining capacity, increasing their mining rewards. This system leverages social networks to spread the adoption of PI tokens globally and attract a large user base in a short period.

3. Developer Rewards: These long-term incentives will be gradually unlocked as the network grows, ensuring continuous funding for the project’s development.

PI Coin Price Fluctuations:

On February 20, 2025, after PI coin was listed on Gate exchange, it once reached a high of $2.88, but the price quickly retraced. Due to large market fluctuations in the early stages of listing, the cashing behavior of early investors led to a temporary oversupply, and the price once dropped to around $0.64. Starting from the low point of $0.64, PI coin showed a strong rebound. By February 24, 2025, the price rose to about $1.61, soaring nearly 160% in a few days, demonstrating the token’s resilience.

Gate spot trading address:https://www.gate.io/trade/PI_USDT

The PI token has experienced multiple significant fluctuations since its launch on the Gate exchange. As of March 19, 2025, the price of the PI token on Gate.io is $1.14475, with a 24-hour trading volume of approximately $150 million.

Reasons why PI Coin Price Dropped

(1) Economic Model

From the actual operational effect of the economic model, there are some potential issues. For example, although the social mining incentive mechanism has promoted explosive growth in the number of users, some users may join simply to obtain mining rewards, lacking a deep understanding and recognition of the project’s long-term value. As mining output decreases with the increasing difficulty, these users are easily discouraged and may even choose to sell the accumulated PI tokens, which can impact the market price. At the same time, due to the lack of a clear deflation mechanism, when the market circulation continues to increase without strong enough demand growth to balance it, this can also lead to increased downward pressure on the price.

(2) Market Expectation Gap

During the initial project preparation and promotion stage, PI coin attracted many potential users and investors with its innovative mobile mining concept and extensive social dissemination. The publicity emphasized the construction of a decentralized cryptocurrency ecosystem that everyone could participate in, creating a positive market atmosphere even before the coin was launched. However, when PI coin was officially launched, the actual progress and functionality of the project did not fully meet the market’s high expectations. For example, the promised rich application scenarios failed to materialize in a timely manner, and the progress of ecosystem development was slow. This led to doubts about its value among investors, prompting them to sell off their coins, causing the price to continue to decline.

(3) Technical Vulnerabilities and Security Risks

The underlying technology of PI tokens is the cornerstone of its value stability. However, after going live, some technical vulnerabilities and security risks have been exposed. For example, the network has experienced multiple instances of instability, with transaction delays, freezes, and even brief interruptions, significantly affecting user experience and transaction efficiency. At the same time, security vulnerabilities have raised concerns about asset safety for users. If users lose confidence in the security of the token, it will inevitably lead to a sharp decline in market trust. If technical issues are not effectively resolved over time, investors will gradually lose confidence in PI tokens and choose to exit, further pushing the price down.

(4) Regulatory policy uncertainty

Due to its global user base and unique operational model, PI coin has attracted close attention from regulatory authorities in various countries. Some countries and regions have questioned the legality and compliance of cryptocurrencies and even introduced restrictive or prohibitive policies. The uncertainty surrounding regulatory policies has made investors anxious about the future development of PI coin, fearing potential policy risks that could result in investment losses. Driven by this concern, a large number of investors have chosen to sell off PI coins to avoid potential risks, undoubtedly delivering a heavy blow to its price and accelerating the downward trend.

In summary, the continuous decline in the price of PI coin after its launch is the result of multiple factors, including the economic model, market expectations, application value, technical security, and regulatory policies. To reverse the unfavorable situation of price decline, the PI project team needs to take effective measures in areas such as application landing, technological upgrades, and regulatory compliance to gradually rebuild market confidence.