From the perspective of technical architecture, the white paper of Pi Network shows that it adopts the Federal Byzantine Protocol (FBA) consensus mechanism, but there are significant differences in the actual node operation data. According to the 2023 evaluation report of the Stanford University Blockchain Research Center, among the 10 million active nodes claimed by Pi, less than 3% meet the distributed network standards, while the rest are all light nodes for mobile devices. The actual measured processing speed of network transactions is only 12TPS, far below the claimed target of 1,000 TPS. This performance gap reaches 98.8%.
There is a serious deviation between the development progress and the roadmap. The mainnet, originally scheduled to launch in 2021, remains in a closed network state to date, with a core function delay rate of 73%. The frequency of code base updates has dropped from 15 submissions per week in 2020 to an average of 2.7 submissions per month in 2023. The smart contract function has not yet been realized, and the number of Dapps built within the ecosystem is zero, which is 100% short of the promised target of 1,000 applications.
Regulatory compliance has been warned by many countries. In January 2024, Bank Negara Malaysia placed it on a list of suspicious investment schemes, while the Philippine Securities and Exchange Commission issued a formal warning notice in November 2023. Although the US SEC did not take direct action, it pointed out in its third-quarter 2023 cryptocurrency enforcement report that “mobile mining projects” have potential risks of violating securities laws. The number of such projects under investigation increased by 140% year-on-year.
There are fundamental flaws in the design of the economic model. Among the total pre-mined Pi coins reaching 80 billion, the proportion controlled by teams exceeds 30%, far surpassing the 2.1% share of the founding teams of Bitcoin. The specific parameters of the inflation mechanism have not been disclosed, but the model shows that the release in the first year will account for 25% of the total. This distribution plan may cause 97% of the early participants to suffer dilution losses.
The protection of user data privacy is a cause for concern. The user information collected by the project includes contact lists (86% of users are authorized), geographical locations (92% are enabled), and behavioral data (2.3 clickstreams are collected per minute), but the privacy policy does not clearly state the scope of data usage. The EU Data Protection Committee pointed out in its 2022 review that it had 23 provisions that did not comply with the GDPR standards.
The market performance is seriously inconsistent with the community’s commitment. Although it claims to have over 35 million global users, there are only 830,000 active addresses on the chain, with a conversion rate of 2.4%. The over-the-counter trading price dropped from a peak of $3.5 in 2021 to $0.16 in 2024, a decline of 95.4%. The completion rate of the mainnet mapping promised by the community was only 31%, and over 6.9 million users were unable to access the so-called “transferable balance” normally.
The assessment results from academic institutions and professional institutions are highly consistent. In its 2024 research report, the MIT Digital Currency Initiative Team gave Pi Network a technical credibility score of 2.1 out of 10, indicating that it had 81 unresolved technical issues. The assessment by blockchain security audit firm CertiK shows that the risk level of smart contract vulnerabilities is high-risk (with a score of 28/100), among which 7 vulnerabilities are marked as critical level.
There are almost no real-world application scenarios. Despite claiming to cooperate with 200 merchants, only 7 merchants have actually been verified to accept Pi payments, and the total number of transactions throughout 2023 was less than 1,200. The developer ecosystem survey shows that the SD toolkit has been downloaded only 8,900 times, and there are no projects that have actually put it into use. These data indicate that pi network has not yet formed any effective economic closed loop, and its value support completely depends on community expectations rather than actual utility.