Pi Network, a mobile mining project that claims to have over 60 million users, officially launched its native PI token on Thursday, marking the transition to its open mainnet.
The launch resulted in extreme price volatility, with PI initially debuting at $1.70 at 09:00 UTC, surging 18% to $2.00, before experiencing a sharp decline of 50% to $0.97 within two hours.
The initial spike pushed PI ’s fully diluted valuation (FDV) to approximately $195 billion, making it briefly more valuable than Solana (SOL). However, the subsequent drop significantly reduced this valuation.
Pi Network reports a self-reported circulating supply of 6.3 billion PI tokens, placing its market capitalization at around $6.1 billion. However, liquidity concerns have arisen, as exchanges currently lack sufficient depth to handle large volumes of trades.
According to available data:
- OKX, the most liquid exchange for PI, has a 2% market depth ranging between $33,000 and $60,000.
- A $100,000 order could significantly impact the price, indicating high volatility and limited liquidity.
- A 2% price move would equate to a $146 million shift in the project’s value, highlighting the risks of trading the token.
To address disparities between buyers and sellers, Pi Network has introduced a “lock-up” period where users can choose to lock their tokens for up to three years in exchange for higher mining rewards.
Pi Network’s Background and Mining Model
Pi Network, launched in 2019, has promoted itself as a user-friendly cryptocurrency mining project that allows individuals to mine PI using mobile devices.
Unlike traditional Proof-of-Work (PoW) mining, Pi uses a consensus algorithm adapted from the Stellar Consensus Protocol (SCP), enabling mining without consuming significant energy or hardware resources.
Users, known as “pioneers,” mine PI by:
- Tapping a button once daily to maintain mining sessions.
- Building security circles to improve network integrity.
- Inviting new members through a referral-based system, which increases their mining rate.
