Pi Network, a crypto project that aimed to be a better version of Bitcoin, has become one of the biggest disappointments of the year as its token has crashed, erasing over $18 billion in value.
The Pi Network price collapse explained
Pi Network is a crypto project launched by Nicolas Kokkalis and Chengdiao Fan in 2018 to become a better alternative to Bitcoin in the way it was mined and used.
Their goal was to ensure that anyone with a smartphone to mine and accumulate the coin. At the same time, unlike Bitcoin, Pi Network would be supported by an ecosystem. It would also be widely accepted by all types of sellers globally.
Pi Network became a highly popular coin, attracting over 50 million users. Its mobile browser had over 100 million downloads on Android and iOS. These miners, popularly known as pioneers, hoped to accumulate as many tokens as possible and then convert them to cash after the mainnet launch.
Pi Network launched its mainnet in February, with some notable exchanges like OKX, Bitget, MEXC, and Gate listing it. These listings pushed its price from $0.6 to almost $3 within a few days.
However, the listing gains were short-lived as the coin plunged by over 90% to the current $0.2280. The collapse has brought its total market capitalization from almost $20 billion to $2.8 billion today.
Why Pi Coin price crashed
There are a few reasons why the Pi Network price has crashed after the mainnet launch. First, the coin plunged because of the significant selling by many pioneers as the price crashed. It is common for early crypto investors to dump their tokens after an airdrop or mainnet launch.
Second, Pi Network’s price crashed because of its high inflation, which has seen the amount of tokens in circulation keep rising. Data shows that over 1.2 billion tokens will be unlocked in the next 12 months.
Also, with less than 9 billion tokens in circulation, over 90 billion more will be unlocked over time. A token normally drops when there is a significant increase in supply and limited demand.
Third, the Pi Network price has plunged because it has become a ghost chain with no real-world utility. No retailer accepts Pi Coin, and no mainstream apps exist in its ecosystem, meaning that it has no utility.
There are other reasons why the Pi Network price has crashed this year, including the lack of major exchange listings after its mainnet launch, claims that it is a scam, and lack of a clear roadmap from the developers.
Can the Pi Network value be saved?
Crypto investors and experts believe that the team can implement some major changes that will boost its price, at least in the near term.
One major remedy would be to improve its tokenomics by introducing a major token burn that reduces the number of all tokens, potentially to 21 billion. The OKB price recently went parabolic after the developers slashed the number of tokens in circulation from over 60 million to 21 million.
Another option would be to ensure that the coin is listed by major exchanges like Binance, Coinbase, and Upbit. An exchange listing would lead to a parabolic move as Pi becomes available to more investors.
Pi Network price would also jump if the team ended its centralization, which currently gives the obscure Pi Foundation too much power. The foundation now holds over 90 billion tokens in hundreds of wallets and is not even audited. As such, changes to distribute its power would likely boost the price.
Other measures that would boost the Pi Network price would be to create a real-world utility for the coin, partnerships with major companies, and solving the underlying KYC verification issues.
The post Pi Network: From a global sensation to a crypto ghost chain appeared first on Invezz