Pi Network is preparing to transition to its open network on February 20, 2025. The project has made significant progress, with over 19 million users verified and more than 10.14 million migrations to the main network. However, as the long-awaited launch approaches, analysts are expressing doubts about the platform's legitimacy and its future.
Suspicion of Fraud and Legal Risks
Crypto journalist Colin Wu, known for his publications on the Chinese market, warned users about possible legal issues related to participating in Pi Network. In a post on X, he stated that involvement in the project could lead to serious legal consequences in certain jurisdictions.
“If you plan to return to mainland China, I recommend staying away from Pi,” Wu stated, hinting at potential charges related to financial pyramid schemes.
Similarly, AB Kuai.Dong, the founder of the metaverse, called Pi Network "the largest financial pyramid in the Chinese-speaking world." He pointed out that the Pi system allows mining tokens directly from mobile phones, and the mining speed increases as new participants join.
“Users invite others to speed up mining. As the network grows, rewards decrease. The main premise of the project is that Pi can be used for purchases, and its value is supposedly comparable to Bitcoin,” Kuai.Dong explained.
Crypto analyst Crypto V acknowledged that the user recruitment structure in Pi Network resembles a pyramid, but he did not explicitly call the project a scam.
“It’s a local marketing project with elements of a pyramid scheme, but that doesn’t mean it’s a scam,” he said.
How Pi Mining Works and Why It’s Controversial
Pi Network launched in 2019, positioning itself as a cryptocurrency that can be mined using mobile phones. Users need only click a button once every 24 hours to earn rewards.
This mechanism led to the project’s popularity in Southeast Asia, South Asia, Africa, and among low-income populations in Europe and America. For many, it became a way to enter the world of cryptocurrency without financial investment. However, the lack of real value for the token and the centralization of the platform raise concerns.
“The Pi team directly tells users that the coin has no value. It will only gain value once the number of users becomes large enough,” said Crypto V.
Where Will Pi Be Listed
As the mainnet launch approaches, some cryptocurrency exchanges have started considering listing Pi. However, Ben Zhou, CEO of Bybit, categorically rejected the possibility.
“I used to work in Forex, where I saw elderly people with placards demanding their money back every day. I don’t want to see this repeated in crypto, so I stay away,” Zhou wrote on X.
Meanwhile, OKX announced the listing of Pi, sparking active debate within the crypto community. Analyst CryptoInsight explained that the project is particularly popular in regions with low financial literacy, making it an easy target for criticism.
He believes that the listing of Pi on OKX reflects a broader issue — the lack of liquidity in the market.
“Exchanges once selected projects for listing based on their usefulness. Now, the financial gains from new tokens are diminishing, and the branding advantage of such listings is weakening,” he noted.
KYC Delays and User Risks
Despite the upcoming launch, many users are facing issues with identity verification. Some have mined Pi for years but now risk losing access to their tokens due to delays in KYC.
“I’ve been in the project since 2020, completed verification with my passport and photo, but I’m still waiting for confirmation,” one user complained on X.
The initial verification deadline was set for December 31, 2024, but it was postponed to February 2025. Users now must complete KYC by February 28. What will happen to the tokens of those who fail to verify remains a mystery. It is possible that all accumulated assets will be burned to reduce the Pi supply and increase demand.
Pi Network Could Collapse After Mainnet Launch
While many users hope for a price increase once the network goes public, analysts predict the opposite. Experts highlight five key factors that could lead to a price drop:
- Constant Delays: The mainnet launch date has been repeatedly postponed, which has already caused Pi’s price to drop by 50% since November. If the launch is delayed again, it could trigger further sell-offs.
- Sudden Increase in Supply: Many users have mined Pi for years and may sell their tokens in bulk once trading begins. This will put pressure on the price.
- Negative Experiences from Other Projects: Airdrop tokens tend to lose value immediately after launching. Examples include Berachain, Hamster Kombat, Wormhole, and ZkSync, each of which lost 50-60% of their value post-launch.
- Unfavorable Market Conditions: The start of the year is traditionally weak for cryptocurrencies, and the summer months often see a drop in investor activity.
- Technical Analysis Indicates Decline: Pi has already broken key support levels at $50 and $55 and has fallen below the 50-day and 100-day moving averages. The next important level is $39. If the price drops below this, sell-offs could intensify.
According to Decrypt, at the time of writing, the estimated value of the asset is $61.08. However, until trading starts on exchanges, this number is purely hypothetical. At its peak, the token was valued at $307.49 per coin.
