The spectacular fall of Pi Network sends shockwaves through the crypto ecosystem: $18 billion vanished in under six months. Allegations of disguised rug pulls and overlooked warning signs raise crucial questions on due diligence in emerging cryptocurrencies. An in-depth analysis of an impending disaster that could reshape investor vigilance standards.
The Pi Network, a crypto project launched in 2019 with the revolutionary promise of smartphone mining accessibility. He has just written its name in the unenviable history of digital financial disasters. The astronomical loss of $18 billion in market capitalization in just six months represents far more than a simple market correction. We are potentially witnessing the programmed implosion of a carefully constructed house of cards.
This financial hemorrhage occurs in a particularly revealing context. Unlike established cryptocurrencies that experience fluctuations correlated with Bitcoin cycles, Pi Network’s collapse shows all the characteristics of a structural failure. Opaque tokenomics, the absence of auditable smart contracts, and a perpetually “in development” mainnet constitute red flags that the crypto community should have identified long before this catastrophe.
The accusation of a “rug pull” – this sudden withdrawal of liquidity orchestrated by developers – nevertheless deserves some nuance. Technically, we’re observing more of a “slow rug,” an insidious variant where value extraction occurs progressively, diluting existing tokens while maintaining the illusion of a viable project. On-chain analysts have detected suspicious movements from wallets linked to the founders, with transfers to centralized exchanges systematically preceding phases of price decline.
Pi Network’s collapse only surprised uninformed investors. Blockchain experts had long warned about structural flaws: an inadequate whitepaper, the absence of verifiable source code, and the unrealistic promise of “mining” tokens without proof-of-work or proof-of-stake.
Its centralized architecture allowed developers to completely control token issuance, causing inflation that diluted early adopters’ value. The artificial volume, inflated by wash trading, masked virtually non-existent liquidity, and the exit of institutional investors triggered a domino effect. With slippage of up to 40%, leading to panic and massive withdrawals.
In short, Pi Network’s collapse illustrates the dangers of unaudited crypto projects, opaque tokenomics, and excessive centralization. The $18 billion lost reminds us that the absence of transparency, auditability, and solid governance can quickly transform an attractive project into a financial disaster.
On the same topic:
Passionate about cryptocurrencies since 2019, I cover the latest news through clear and accessible articles. My goal is to make crypto understandable for everyone, with reliable and well-researched content.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
