Pi Network’s Crypto Plunge and Centralization Issues
Pi Network witnessed a significant drop on Saturday. The price of Pi Coin (PI) fell to $0.7040, a 57% decrease from its recent peak. This price plunge wiped out $6 billion from its market cap, reducing it to $5 billion.
Many concerns are linked to Pi Network. Centralization is the primary issue. Unlike Bitcoin (BTC), which generates new coins through mining—a process of solving math puzzles—Pi’s model is different. Pi doesn’t use proof-of-stake like Cardano (ADA) or Avalanche (AVAX) that rely on validators.
The total supply of Pi stands at 100 billion coins, with only 7.15 billion in circulation. All Pi coins are pre-mined and stored in wallets managed by the Pi Foundation. The foundation controls the remaining 92 billion unlocked tokens, as shown by PiScan.
- The Pi Foundation’s membership is not clear, and its holdings are unevaluated.
- This concentration of power poses significant risks if a hacker gains access to the wallets.
- Due to these concerns,major crypto exchanges like Binance and Coinbase have not listed PI.
Further challenges arise as millions of Pi tokens enter the market monthly. Over 1.48 billion tokens will unlock in the next year, with more to follow in subsequent years.
The Pi Coin price peaked at $1.6673 before falling sharply to $0.6980. The price chart shows that breaking the $0.7760 support invalidates a bullish formation. As the coin breaches the 25-period moving average and the Relative Strength Index declines below 50, further drops may test the $0.60 level.A break below could lead to a price as low as $0.40.
