Pi Network Token Launch: A Roller-Coaster Ride for Traders
The Pi Network, a smartphone-based mining initiative boasting an impressive user base of 60 million, officially launched its native PI token on Thursday. This event sparked a dramatic trading experience, with the token’s value initially soaring by 18% within minutes, only to plummet by 50% shortly thereafter.
At the outset, the PI token debuted at a price of $1.70 at 09:00 UTC. It quickly climbed to a peak of $2.00, before settling down to around $0.97. This initial price surge propelled the fully diluted value (FDV) to an astonishing $195 billion, nearly double the market capitalization of the Solana blockchain’s SOL token.
It is essential to note that the FDV is calculated based on the maximum supply of the token, which stands at 100 billion. Currently, the self-reported circulating supply is approximately 6.3 billion, giving the Pi Network a market cap of around $6.1 billion.
The Pi Network has drawn comparisons to other viral crypto projects from previous market cycles, such as SafeMoon, which gained notoriety for its aggressive marketing strategies and referral schemes aimed at attracting a retail audience. To participate in mining the Pi token on their mobile devices, users must first receive an invitation from an existing user. This invitation includes a unique code that can be shared with others. As users refer more individuals, they are rewarded with additional tokens, creating a structure reminiscent of multi-level marketing (MLM) or pyramid schemes.
Launched in 2019, the Pi Network saw its testnet go live in 2020. The recent token release marks the commencement of the Pi Network’s mainnet, allowing users to transfer and trade the tokens they have accrued. However, a significant challenge persists as exchanges currently lack the liquidity necessary to accommodate the billions of tokens being traded. Even the most liquid exchange, OKX, is experiencing a mere 2% market depth within a range of $33,000 to $60,000. This means that a single order of $100,000 could result in considerable price fluctuations, contributing to a highly volatile trading atmosphere.
Market depth is a crucial measure as it indicates the amount of capital needed to shift an asset’s price in either direction. Given the token’s market cap, a 2% move translates to a staggering $146 million change in the project’s overall value.
In an effort to balance the disparity between buyers and sellers, Pi Network has introduced a “lock-up” period for token holders, which can extend up to three years. By opting to lock up their tokens, holders can earn higher mining rewards. This strategy mirrors a tactic employed by Richard Heart’s controversial HEX token, which experienced a staggering decline of over 99% in value between 2021 and 2024, leaving many locked tokens rendered virtually worthless.
