Pi Token Debuts with Extreme Volatility, Raising Market Questions

Pi Network, a mobile-based cryptocurrency project boasting 60 million users, launched its native PI token on Thursday, triggering a highly volatile trading session. The token’s price initially surged 18% before plummeting 50% within two hours, highlighting concerns about liquidity and market stability.

The PI token debuted at $1.70 at 09:00 UTC, reaching a peak of $2.00 before dropping to $0.97. The initial price surge momentarily inflated the token’s fully diluted valuation (FDV) to $195 billion—nearly double that of Solana’s SOL token. The FDV calculation is based on the token’s maximum supply of 100 billion. However, with a self-reported circulating supply of 6.3 billion, Pi Network’s market capitalization currently stands at approximately $6.1 billion.

Pi Network has drawn comparisons to previous viral cryptocurrency projects, such as SafeMoon, which leveraged aggressive marketing and referral-based rewards. To begin mining PI, users must receive an invitation from an existing member. They are then issued their own referral code, incentivizing them to bring in new users for additional token rewards. This structure has drawn parallels to multi-level marketing (MLM) or pyramid schemes.

Launched in 2019, Pi Network’s testnet went live in 2020. The release of the PI token marks the beginning of its mainnet phase, allowing users to transfer and trade previously mined tokens. However, liquidity issues remain a significant challenge.

Currently, major exchanges, including OKX, report limited market depth, with only $33,000 to $60,000 available at 2% depth. This means large trades can cause substantial price swings. For example, a $100,000 order could shift the token’s price dramatically, creating an unstable trading environment. Given the token's current market capitalization, a 2% price move could translate into a $146 million shift in total project valuation.

To mitigate liquidity imbalances between buyers and sellers, Pi Network has introduced a voluntary “lock-up” period of up to three years. Users who opt to lock their tokens receive increased mining rewards. However, similar incentive models have been met with skepticism in the past. Richard Heart’s HEX token, which employed a comparable staking mechanism, lost over 99% of its value between 2021 and 2024, rendering locked tokens largely worthless.