Pi Network Faces Centralization Concerns as Core Team Holds 82.8% of Pi Coin Supply

The pi Network, a cryptocurrency project, is facing growing concerns over its centralization as its core team holds a significant portion of the total Pi Coin (PI) supply. According to data from PiScan, the core team controls approximately 62.8 billion Pi Coins across six wallets, with an additional 20 billion PI distributed among roughly 10,000 unlisted wallets. This brings the total supply held by the core team to about 82.8 billion PI, which represents a substantial portion of the total maximum supply of 100 billion.

This concentration of Pi Coins raises significant concerns about the project's future decentralization. While such centralization may be necessary during the early stages of a network's development, it poses risks as the network matures. The limited number of nodes and validators further exacerbates these concerns. Pi Network currently operates with only 43 nodes and three validators globally, in stark contrast to more established Layer 1 networks like Bitcoin, which operates with over 21,000 nodes, Ethereum with over 6,600 nodes, and Solana with around 4,800 nodes. This limited infrastructure means that control of the network is concentrated in the hands of a few entities, making it much more centralized than its counterparts.

Adding to the centralization issues is the lack of transparency in Pi Network's operations. Analyzing the network's source code and on-chain data is currently challenging due to its incomplete openness. This lack of transparency adds another layer of uncertainty and raises questions about the network's security and reliability. Furthermore, Pi Network has introduced artificial intelligence (AI) into its Know Your Customer (KYC) process, using ChatGPT as a trusted AI partner to automate identity verification and enhance security measures. This feature, which was not mentioned in previous versions of the privacy policy, brings a new layer of complexity to how user data is shared and processed.

These concerns add to a growing list of issues surrounding Pi Network. The community has previously highlighted technical difficulties during the mainnet migration, and many users have expressed frustration with the long lockup period and limited immediate utility of the Pi Coin. This dissatisfaction has resulted in a sharp decline in Pi Network's popularity, as reflected in the significant drop in search interest for "Pi Network" on Google Trends since the mainnet launch on February 20. On launch day, the search interest was at 100, indicating a peak of public attention and excitement surrounding the event. However, this figure has plummeted to just 12 at the time of this report, reflecting a steep decline in interest.

In summary, the Pi Network faces significant challenges related to centralization, transparency, and user satisfaction. The core team's control over a substantial portion of the Pi Coin supply, the limited number of nodes and validators, and the lack of transparency in the network's operations raise concerns about the project's future decentralization and security. Additionally, the introduction of AI into the KYC process and the technical difficulties during the mainnet migration have further complicated the network's development. As the Pi Network continues to evolve, it will be crucial for the project to address these issues and work towards greater decentralization and transparency to regain the trust and support of its community.