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- Pi Network is reported to be considering the implementation of a price-pegging mechanism to reduce volatility and provide stability.
- The mechanism is reportedly designed for the Pi Coin to have a target price of 314,159 USD, representing 314,159 × 10¹⁸ Wei.
Pi Coin has made a dramatic entry into the list of top 12 largest cryptos by market cap after recording a significant surge of 23% in the last 24 hours. According to our market data, the asset is making a surprising attempt to overturn the 11% loss recorded on the weekly price chart. Meanwhile, the asset has moved from its daily low of $1.3, recorded in our recent analysis, to turn the $1.7 resistance level into support.
Amidst the backdrop of this bullish run, Pi Network is reported to be making a groundbreaking decision to implement a price-pegging mechanism. Technically, this is achieved by fixing the price of a token to another token or a basket of tokens at a specific rate to reduce volatility and provide stability.
According to the available information, the Pi community has discovered a smart contract code linked to Chainlink. This implies that the team may be planning to stabilize the asset’s value through an automated minting and burning system. Interestingly, this approach is similar to the mechanisms used by stablecoins like USDC and USDT.
While the PiCoreTeam has not yet confirmed the pegging mechanism, market analysts have speculated that this implementation could cause the asset to be widely integrated and adopted into various financial systems. Meanwhile, this algorithmic pegging system would demand that additional tokens be minted whenever the price falls below the target. On the other hand, additional tokens would be burnt whenever the price exceeds the target.
Based on the report, the Pi Coin is expected to have a target price of 314,159 USD. This is a representation of 314,159 × 10¹⁸ Wei, which is the smallest unit of Ethereum.
Meanwhile, the Pi Network has been facing growing concerns over centralization. According to reports, the core team of the network retains control of 82.8 billion Pi coins, representing 82% of the total supply.
Pi Network’s Security Concerns
Apart from this, the Pi Network’s infrastructure has also come under security scrutiny as it only operates with 43 nodes and three validators. Comparatively, Bitcoin is reported to have more than 21,000 nodes while Ethereum has 6,600 nodes. This has brought the Network’s capacity for decentralized verification under scrutiny. Per reports, the limited nodes and validators increase its vulnerability to manipulation and centralization.
In a recent update, we discussed the rising concerns about the Pi Network’s Know-Your-Customer (KYC) verification deadline which coincided with the 6th anniversary of the project. According to that report, thousands of users complained of difficulties in completing this verification as 80% of the affected users were not able to verify their coin balances.
Also, there have been several reports of user dissatisfaction attributed to prolonged lockup periods, technical migration issues, and a declining coin value. As highlighted in our previous article, 63% of Pi Network users have their coins locked up till 2027, forcing most of them to consider alternatives.
