Pi Network's KYC Innovation vs. Price Pressures: A Trust Test

The Pi Network has announced a major protocol upgrade from version 19 to 23, which is expected to enhance functionality and security while addressing compliance concerns. This update, based on custom adaptations of Stellar v23, introduces a decentralized Know-Your-Customer (KYC) process that allows trusted third-party solutions to participate in identity verification [1]. The upgrade aims to streamline compliance and build trust in the ecosystem, which could potentially increase demand for the Pi Coin [2].

The introduction of a Linux Node service marks another significant step in the network's evolution. This enhancement expands the platform’s accessibility to developers and allows for greater flexibility and participation in the Pi ecosystem [3]. The Core Team has indicated that the rollout of the Linux Node service is part of a broader strategy to strengthen the decentralized backbone of the network. This step is considered crucial as the team prepares for the protocol upgrade from v19 to v23 [3].

Despite these developments, the price of Pi Coin (PI) remains under pressure. As of the latest data, PI trades at around $0.345, holding just above its key support level of $0.344 [2]. The asset has seen considerable volatility, with a drop to an all-time low of $0.33 on August 26, followed by a brief recovery to $0.37. However, recent weeks have seen the token fall below $0.35, trading only 5% above the all-time low [1]. The token has experienced a decline of over 88% since its peak in late February [1].

The upcoming protocol upgrade and the recent Linux Node addition have not yet translated into strong investor inflows. The Chaikin Money Flow indicator shows limited inflows into the Pi Coin, raising concerns about the token’s ability to sustain a recovery [2]. Analysts suggest that without stronger buying pressure, Pi Coin could face further downward movement, potentially testing support levels as low as $0.322 if market conditions deteriorate [2].

Looking ahead, the Pi Network’s token unlock schedule in the coming weeks will play a critical role in determining the token’s short-term trajectory. The largest unlock events are scheduled for September 6 and September 11, which could introduce selling pressure due to the large number of tokens being released. However, after these dates, the frequency of unlocks is expected to decrease, potentially easing pressure on the token’s price [1].

The network’s long-term potential remains a topic of debate. While some analysts remain cautiously optimistic, others argue that Pi Coin would need to experience an extraordinary surge in demand to reach triple-digit prices, which is currently deemed highly unlikely [4]. Nevertheless, the project’s continued focus on technological upgrades, compliance, and expanding its user base suggests a long-term approach rather than a short-term speculative play [4].

Source:

[1] Massive Pi Network Update Drops: What Every PI User ... (https://cryptopotato.com/massive-pi-network-update-drops-what-every-pi-user-needs-to-know/)

[2] Can Upcoming Pi Network Upgrade Save Price from All- ... (https://beincrypto.com/pi-network-upgrade-could-save-price/)

[3] Pi Network's Latest Update Explained - And Why It's a Big ... (https://cryptopotato.com/pi-networks-latest-update-explained-and-why-its-a-big-deal/)

[4] Can Pi Network Price Hit $100? (https://coinpedia.org/news/can-pi-network-price-hit-100-2/)