Image source: https://minepi.com/

Introduction: The Promise and Perils of Pi Network

Launched in 2019, Pi Network aimed to democratize cryptocurrency by enabling users to mine tokens via a mobile application, eliminating the need for energy-intensive hardware. This innovative approach attracted over 60 million users worldwide, fostering a robust community of “Pioneers” who mined PI tokens during the project’s enclosed mainnet phase.

On February 20, 2025, Pi Network transitioned to its open mainnet, marking a significant milestone in its development. This shift allowed users to transfer their mined tokens to external wallets and trade them on exchanges, introducing real-world utility to the PI token.

However, the journey has not been without challenges. The project faced multiple delays in launching its open mainnet, leading to skepticism about its execution capabilities. Additionally, the lack of clear timelines and transparency in its roadmap has frustrated many community members.

As Pi Network navigates its post-mainnet phase, it faces critical risks that could impact the PI token’s value. These include potential mass sell-offs by early adopters, market volatility, and questions about the token’s utility and valuation.

Investors and users must weigh these factors carefully as they consider the future of Pi Network in the evolving cryptocurrency landscape.

Mainnet Launch: A Double-Edged Sword

The launch of Pi Network’s Open Mainnet on February 20, 2025, marked a pivotal moment in its evolution from a closed ecosystem to a fully decentralized blockchain. This transition enabled external wallet transfers, exchange listings, and the development of decentralized applications (dApps), generating significant excitement within the crypto community.

However, the launch also introduced substantial challenges. Shortly after the mainnet went live, Pi Coin experienced extreme volatility. The token’s price surged by 45% within an hour, reaching a high of $2.10, but then plummeted over 50% to a low of $1.01 within hours. This rapid decline raised concerns about the token’s long-term stability and market resilience.

Several factors contributed to this volatility. The sudden influx of tokens into the market, as early adopters sought to capitalize on their holdings, led to an oversupply that outpaced demand. Additionally, technical weaknesses in Pi’s price charts signaled potential further downturns, with the token slipping below key support levels.

Liquidity issues also emerged as a significant concern. Despite listings on some major exchanges, the market depth for Pi Coin remained shallow, making it susceptible to large price swings from relatively small trades.

Moreover, the project’s centralized control structure and lack of independent validators have drawn criticism, raising questions about its commitment to decentralization. The mandatory Know Your Customer (KYC) verification process further added to privacy concerns among users.

In summary, while the Open Mainnet launch expanded Pi Network’s capabilities and market access, it also exposed the project to significant risks. Investors and users must navigate these challenges carefully, considering both the opportunities and the potential pitfalls associated with Pi Coin’s evolving landscape.

Mass Sell-Offs: The “Airdrop Dump” Phenomenon

Image source: Pi Network price prediction 2025 – 2030 after the mainnet launch

The launch of Pi Network’s mainnet marked a significant milestone for the project, transitioning from a testnet to a fully operational blockchain. However, this event also triggered a substantial sell-off, commonly referred to as an “airdrop dump,” leading to a sharp decline in Pi Coin’s value.​

Early Miners Cashing Out

Over the years, Pi Network amassed a vast user base through its mobile mining approach, allowing users to accumulate Pi Coins with minimal effort. With the mainnet launch enabling trading on exchanges like Gate.io, many early adopters seized the opportunity to liquidate their holdings. This sudden influx of sell orders overwhelmed the market, causing Pi Coin’s price to plummet by over 55% within 24 hours, dropping from initial highs above $2 to as low as $0.78. ​

The Airdrop Effect

Pi Network’s distribution model, which allowed users to mine coins for free, mirrors that of many airdrop-based cryptocurrencies. Historically, such models often lead to immediate sell-offs upon token launch, as recipients, having acquired tokens at no cost, are inclined to sell for instant profits. This phenomenon contributes to increased supply without corresponding demand, exerting downward pressure on the token’s price.

Limited Real-World Utility

Despite its extensive user base, Pi Network currently lacks substantial real-world applications or partnerships that could drive demand for Pi Coin. The absence of tangible use cases means that, beyond speculative trading, there is limited incentive for holding the token, further exacerbating the sell-off.

Market Sentiment and Liquidity Concerns

The broader cryptocurrency market’s volatility also played a role in Pi Coin’s price decline. Analysts observed that trading volumes were relatively low, with most transactions involving small amounts of Pi Coin, indicating weak liquidity. This lack of substantial buy orders made it challenging to absorb the selling pressure, leading to further price drops.

Market Volatility: Navigating the Bearish Crypto Climate

The broader cryptocurrency market has experienced volatility, with several assets facing price corrections. Pi Network, being a relatively new entrant, is particularly susceptible to market sentiment swings. Negative market conditions can amplify the challenges faced by Pi Network’s token price.

Inflationary Pressures: Potential Token Supply Expansion

Pi Network’s tokenomics are designed with a capped total supply of 100 billion Pi tokens, distributed as follows: 65% for mining rewards, 10% for ecosystem development, 5% for liquidity, and 20% for the Core Team. However, the release of these tokens into circulation is gradual and contingent upon users’ migration to the mainnet. This approach aims to ensure fairness and prevent any single entity from gaining an undue advantage.

Despite these measures, concerns about inflationary pressures persist. As more users migrate and unlock their tokens, the circulating supply increases, potentially leading to a decrease in token value if demand doesn’t keep pace. To mitigate this, Pi Network has implemented mechanisms such as declining mining rewards and halving events, similar to Bitcoin, to control the rate of new token issuance. Additionally, the network has introduced token-burning mechanisms, where transaction fees are permanently removed from circulation, effectively reducing the total supply. As of March 2025, approximately 528,671 Pi tokens have been burned, with a daily burn rate of 3,000 to 4,000 tokens. These strategies aim to balance token supply and demand, supporting the long-term value of Pi.

Conclusion: Weighing the Risks Before Investing in Pi Network

While Pi Network presents an innovative approach to cryptocurrency, several factors suggest a potential price decline of over 35%. Investors should consider these risks and conduct thorough research before making investment decisions.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are subject to market risks. Please consult with a financial advisor before making investment decisions.