Pi Network, known for its unique smartphone mining capabilities, has launched its native PI token, causing significant fluctuations in the market. The token debuted with an initial fully diluted value (FDV) soaring as high as $195 billion, despite facing considerable liquidity challenges.
According to Coindesk, the PI token was introduced at $1.70 and quickly surged to $2.00. However, within two hours, it lost 50% of its value, plummeting to $0.97, leading to a market capitalization of approximately $6.1 billion.
In the following hours, the situation worsened, with trading volumes exceeding $1.3 billion during its initial launch. The token ultimately crashed to $0.69, resulting in a staggering 60% decline and wiping out almost all investor gains.
This initial spike sent the FDV nearly doubling the value of Solana’s SOL, highlighting the speculative nature of the launch, with the FC calculated based on the token’s maximum supply of 100 billion. As of now, the self-reported circulating supply stands at around 6.3 billion tokens, contributing to the current market cap.
Pi Network has drawn comparisons to previous viral tokens such as SafeMoon, which utilized aggressive marketing and referral schemes to attract a retail audience. New users must obtain an invitation from current members to begin mining PI tokens, creating a system that resembles multilevel marketing (MLM) or pyramid schemes. This structure rewards users with more tokens for each new referral, fueling the project’s growth.
The Pi Network has been operational since 2019, with its testnet launching in 2020. The release of the PI token marks the official start of the Pi Network mainnet, enabling users to transfer and trade their accrued tokens. However, the current trading environment is precarious; even the most liquid exchange, OKX, has reported a market depth of only 2%, ranging between $33,000 and $60,000. This low liquidity means that larger orders could significantly impact the token’s price, amplifying market volatility.
Market depth reflects the capital needed to influence an asset’s price, and in the case of PI, a 2% move could represent a staggering $146 million shift in value.
Following the mainnet launch, a total of 1 billion from the total 9.7 billion PI tokens are available initially. The remaining tokens will be locked in user wallets and gradually unlocked over time. Despite its rapid growth, early investors took advantage of the classic pump-and-dump scheme, quickly selling their tokens and causing the price to collapse from $2 to $0.66 within the first day of trading.
Pi Network’s market cap currently stands at around $4.25 billion, buoyed by its base of over 60 million users, with more than 10 million already migrated to the mainnet. Cryptocurrency exchanges such as OKX and Bitget have begun listing Pi Coin, while Binance and Coinbase are in active negotiations to support the token. These platforms could provide much-needed liquidity and credibility, potentially aiding the Pi Network’s recovery.
The price collapse has left long-term supporters feeling deceived. Crypto commentator Wood LightYear expressed disappointment regarding the launch, noting that early miners who invested years into mining Pi now see new buyers acquiring it at significantly lower prices.
Shogun Lin
