Key Takeaways:
Pi Network’s record-breaking airdrop sparked scam accusations over its mining model and trading volumes.
ByBit refused to list PI, with its CEO calling the project a scam, while Pi Network denied the claims.
PI token led Gate.io trading with $508M in volume, surpassing Ethereum and Bitcoin.
The Pi Network (PI) price first dropped 70%, then surged. Trading volume spiked, and scam accusations followed. What’s going on?
Pi Network has ended its mainnet phase, which has been in effect since 2021. The situation is somewhat similar to Berachain (BERA), which has been in this stage for several years. However, the PI airdrop was not as straightforward.
Reports indicate that the PI airdrop turned out to be the largest in crypto market history in value terms. Previously, the leadership had aligned with Uniswap (UNI).
According to CoinGecko, Uniswap’s airdrop in 2020 reached an all-time high token valuation of $6.43 billion. No subsequent airdrop has exceeded that value.
The circulating supply of the PI coin is 6.4 billion. On the first day of trading (Feb. 20), the token reached an all-time high of $1.97.
Currently, the PI coin price has dropped to $1.5, approximately 20% below its all-time high. Some in the crypto community remain skeptical about the project, even though the airdrop occurred without the scandals seen in the case of Berachain.
For example, posts on X often resemble advertisements. It is notable that, over the years, Pi Network has managed to attract a large user base.
One contentious aspect of the Pi Network is its concept. The team simplified the mining process by developing an application that allows users to mine the PI coin without investing additional funds. The process is generally straightforward.
Users must download the Pi Network application and join a session (lasting 24 hours), after which a certain number of PI coins are credited to their account. Mining efficiency depends on the user’s status, participation in the referral program, and other incentives.
Even before the PI token airdrop, some community members viewed the project as a financial pyramid since it appeared to offer money from nothing. This is a red flag that often suggests potential issues with the project.
Suspicion increased further when the ByBit crypto exchange refused to list the PI token.
‘Yes, I still think you are a scam, and no, Bybit will not list a scam’
On Feb. 20, PI coin was launched on the centralized exchange (CEX). Starting at almost $2, the price fell to $0.6 before rising above $1.
According to CoinGecko data, Gate.io has become the largest exchange for PI trading, accounting for nearly 48% of the volume. Bitget follows with 25.3% and OKX with 22%. CoinGecko notes that these three platforms are showing abnormally high trading volumes.
Gate.io data confirms this observation. The trading volume of PI coin on Gate.io reached $508.65 million, compared with $360.26 million for Ethereum (ETH) and $216.72 million for Bitcoin (BTC).
This level of volume is unusual. Among all cryptocurrencies on Gate.io (excluding stablecoin Tether), Pi Network ranks first.
On Feb. 19, before the PI airdrop, one of the pages on X associated with the project posted an accusation claiming that ByBit did not want to list the token. In response, ByBit CEO Ben Zhou recalled Pi Network’s legal issues in China and labeled the project as a scam.
On Feb. 12, Ben Zhou had already expressed his view on Pi Network in response to similar claims, advising people to stay away from the project.
It is worth noting that the X profile criticizing ByBit is not the official Pi Network page. Numerous such pages appear when searching for “Pi Network,” and whether the project supports them is unclear.
The official Pi Network account later responded to Ben Zhou’s accusations, addressing the situation in China. According to the project, scammers attempted to impersonate Pi Network representatives to deceive users. The project stated that it contacted Chinese authorities to have the false accusations removed:
Is Pi Network Really a Scam?
The concept of the project appears to offer money from thin air. Users simply download the application, launch a session, and wait 24 hours for PI tokens to be credited.
However, it is important to note that Pi Network does not require any asset contributions (crypto or fiat). In contrast, a typical financial pyramid would require users to contribute funds—for example, investing $1,000 in exchange for $100,000 within a month.
At first glance, the project’s white paper and description of its mining process appear serious and include mathematical calculations. The founders, Nicolas Kokkalis and Chengdiao Fan, are Stanford alumni. The project positions itself as “mathematical,” reinforced by its name and its launch on a day that aligns with the number Pi.
Nevertheless, accusations of a scam from influential figures raise concerns. The abnormal trading volume also suggests that many users are trading the token, even though Pi Network was not among the most popular projects before the airdrop.
Some observers see this as a sign of a financial pyramid, where the organizers deliberately build a large user base to inspire confidence.
There might be positive news for those who participated in PI mining through the application and received tokens during the airdrop. In theory, these individuals should not lose their money since they did not invest any funds—only their time.
However, those looking to buy PI tokens now or start participating in mining should exercise caution and watch how Pi Network behaves publicly.
Currently, Pi Network is attempting to address the accusations and demonstrate its legitimacy.
Additionally, Binance may soon add PI coin. The exchange is conducting a survey among users regarding the listing, and the majority have responded in favor. The survey will remain open for another three days.
