The Pi Network community is on edge as over 23 million Pi tokens are slated for release on March 21, triggering concerns about price stability. This influx comes amidst a sharp decline in Pi’s value, leaving investors questioning the efficacy of the network’s built-in burn mechanisms.
Unlike traditional cryptocurrencies with publicized burn events, Pi Network employs a subtle approach. Transaction fees are permanently removed from circulation, gradually reducing supply. Additionally, tokens from accounts failing KYC verification are effectively eliminated. Data from early March reveals approximately 528,671 PI tokens have been burned, with a daily rate of 3,000 to 4,000 tokens.
However, these burn rates pale in comparison to the upcoming token unlocks. On March 17, 23.1 million PI tokens were released, valued at roughly $26.56 million. Another 23.4 million PI, worth $26.91 million, are set to flood the market on March 21. This surge in supply is a primary driver of Pi’s recent price drop, currently trading at $1.15, a 23% decline in a week.
Analysts suggest key support levels are crucial for Pi’s potential recovery. The network needs to maintain above the $1.05 support to avoid further bearish momentum. Breaking past the $1.37 resistance could signal a potential rally. The psychological support at $1.10 also stands as a critical barrier against further declines.
Pi’s long-term success hinges on real-world adoption and effective supply control. Encouragingly, Pi’s adoption is growing, particularly in regions like China, where some businesses accept it as payment. Continued adoption could bolster demand, mitigating the impact of token unlocks.
Simultaneously, the network’s deflationary strategy, burning transaction fees and removing inactive tokens, could help balance supply. The recent mainnet transition, which removed tokens from accounts missing the KYC deadline, reduced the total supply to 6.99 billion.
Also Read: Will Binance Ever List Pi Coin? Here’s Why Pi Network Was Excluded from ‘Vote to List’
As March 21 approaches, the community watches closely. The market’s reaction to the latest token unlocks will determine Pi’s short-term trajectory. While uncertainty persists, Pi’s ability to maintain scarcity while increasing utility will ultimately define its long-term viability.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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