The Pi Network Price Remains Under Pressure as Concerns About Its Future Persist

The Pi Network price remained under pressure as concerns about its future persisted after last week's 'nothingburger' news event. The Pi Coin token was trading at $0.7295 on Monday, a decline of over 56% from its peak last week.

The price of Pi Network (PI) remained under pressure on Monday, continuing concerns about its future following last week’s ‘nothingburger’ news event. The Pi Coin token was trading at $0.7295, down over 56% from its peak last week. It now faces support at the 23.8% Fibonacci retracement level, and a break lower could open the door for further declines to $0.5650.

A good cryptocurrency should have several important characteristics, with decentralization being one of them. This is what separates these coins from fiat currencies, which are controlled by central banks.

Pi Network faces a similar problem, as it is similar to a central bank that controls supply. Data shows that there are now 7.16 billion Pi coins in circulation, while the remaining 92.8 billion are locked.

Pi Network is different from other cryptocurrencies in that all of its tokens are pre-mined and locked in wallets controlled by the Pi Foundation. This is different from Bitcoin, where new coins are mined by solving complex mathematical equations, and Ethereum and other proof-of-stake coins.

The issue with Pi Network’s model is that all of the coins are controlled by an obscure foundation, whose members no one knows and who are not represented by the pioneers, who theoretically control most of the tokens.

Pi Network has a diluted valuation of over $73 billion, making it a big player in the crypto market. As such, one solution would be to hire a top-4 auditing company, such as Deloitte or PwC, to audit these tokens regularly.

Another solution would be a pledge to fully decentralize the network and reduce the power of the foundation.

This ongoing centralization also puts the community at risk for two main reasons. Firstly, as we saw last week with Coinbase (NASDAQ:COIN), sabotage or an insider leak is a possibility. In this case, something can happen to the foundation’s wallet, leading to a token dump.

Secondly, this centralization means that major tier-1 exchanges will never list Pi Network due to the risks described above.

The other risk that Pi Network faces is that, currently, the chain lacks inherent utility, as no one is using the ecosystem’s apps. While the Pi Network Venture is a noble idea, analysts predict that it will take over a year for notable apps to be developed within the ecosystem.