Pi Network Under Scrutiny: Could History Repeat Terra’s Collapse?

Analysts sound alarm bells as Pi Network shows eerie parallels to Terra Luna’s pre-crash patterns.

While Pi’s grassroots mining approach differs from Terra’s algorithmic stablecoin model, the unsustainable tokenomics and hype-driven valuation raise red flags. Remember when ’this time is different’ was Luna’s epitaph?

Key concerns include Pi’s unproven mainnet adoption, centralized distribution, and that classic crypto combo: vague utility meets aggressive shilling. But hey—at least the mining app gives your thumb a workout.

Bull case: Pi executes flawlessly and becomes the WhatsApp of crypto. Bear case: Another cautionary tale for your Crypto Disasters podcast. Place your bets.

Analyst’s Warning on Reserve and Transparency

Szymanski’s findings clearly illustrate the centralization aspect of Pi Network. The 89 billion coins held in reserve, alongside the 11 billion in circulation, can potentially evaporate the price overnight, whether through mass sale or internal conflict. With Terra Luna’s trauma still fresh, investors are viewed as vulnerable to this level of selling pressure.

The system adopts a pre-mined asset model instead of mining, with these coins stored in a single address and lacking independent security audits on how transactions are managed. Giant exchanges like Binance and Coinbase have stalled listing requests citing this deficiency. This large unregulated pool has become a “single point” that could lock the ecosystem with just one mistake or malicious attack.

Under criticism, the PI coin community has intensified “do your own research” (DYOR) warnings on social media channels. While some argue that the team plans to share profits with the community, lack of a tangible roadmap or audit report fails to build trust. Market observers believe the psychological threshold will not be surpassed until the team’s coin ratio falls below 50%.

Potential Rescue Plan: Roadmap and Audit

According to Szymanski, Pi coin can still find an exit route. As a first step, the team should share their coin allocation plan along with dates and disclose the schedule for releasing locked coins. A clear program may ease the fear of sudden sales, preventing a repeat of the uncertainty from the Terra Luna era.

The second step involves obtaining a comprehensive report from an independent audit firm. A report covering code security, wallet management, and reserve status could pave the way for long-awaited major exchange listings. Support from major exchanges will increase liquidity and lower the risk of price manipulation. Under such a scenario, the Pi community could refresh its reputation through steps toward decentralized management.

Lastly, coin oversight mechanisms that reduce centralization risk may come to the fore. Solutions such as multi-signature wallets, third-party custodial agreements, and phased unlocking weaken the “single wallet” perception.

Experts highlight the market’s limited patience should the team delay these actions. They argue that if transparency cannot be ensured, it is only a matter of time before a sell-off wave is triggered.