Summary
-
Centralization & Dubious Technology: Accusations of misleading claims of decentralization, with technology allegedly copied from Stellar and lacking key features for DeFi or scalability.
-
Questionable Tokenomics and MLM-like Model: Concerns raised about the referral system resembling MLM, and Ponzi-like elements in token lock-up benefiting insiders.
-
Lack of Transparency: Criticism regarding the absence of disclosed insider token allocation, contradicting claims of fairness and raising scam suspicions.
Pi Network is once again under the spotlight after prominent crypto figure Justin Bons, the founder of CyberCapital, publicly described the project as a “scam.”
Bons voiced worries concerning the platform’s underlying technology, its economic model, and the structure of its token distribution.
He asserted these elements are fundamentally flawed and could pose risks to individuals investing in the project.
“Scam” Accusations From CyberCapital Head
In a series of statements released on the social media platform X (formerly known as Twitter), Bons detailed multiple problematic aspects of the Pi Network.
He contended that, despite the project’s self-proclaimed decentralization, Pi Network’s operations remain heavily centralized.
Furthermore, Bons expressed skepticism regarding the project’s prolonged five-year delay in launching its main network.
He argued that promises of groundbreaking innovation and true decentralization made by Pi Network were misleading to the public.
A central claim in Bons’ critique was that Pi Network’s foundational technology was, in fact, derived from the existing cryptocurrency Stellar (XLM).
Adding to his negative assessment, Bons argued that the lack of a Turing-complete virtual machine within Pi Network architecture fundamentally restricts its potential for developing decentralized finance (DeFi) applications.
This absence, according to Bons, renders the DeFi aspirations for Pi Network merely “wishful thinking.”
He further elaborated that this technological limitation inherently makes the network neither scalable to accommodate significant growth nor programmable for diverse applications.
Bons also pointedly addressed Pi Network’s user acquisition strategy, specifically its referral system.
He drew a comparison between this program and a Multi-Level Marketing (MLM) scheme, suggesting its structure prioritizes recruitment over genuine utility.
He reasoned that this type of system incurs unnecessary overhead for the network itself without delivering tangible advantages or value to the users participating.
Further amplifying his concerns, Bons highlighted what he described as a Ponzi-like characteristic within Pi Network’s token “mining” process.
He explained that the imposed lock-up periods for mined tokens primarily benefit project insiders.
This mechanism, Bons alleges, artificially inflates the perceived value of the token, thereby enabling early participants or insiders to profitably exit their positions at the expense of later adopters.
Another significant issue raised by Bons was the lack of transparency surrounding Pi Network’s operations.
He criticized the project for its failure to publicly disclose details about token allocations to insiders, even though the platform rigorously enforces Know Your Customer (KYC) verification procedures on its users.
Bons speculated that insiders could potentially control as much as 20% of the total token supply, a level of concentration he argues directly contradicts the project’s publicly stated commitment to fairness and equitable distribution.
“The fact that PI has reached the top 20 [cryptocurrencies] is an absolute embarrassment to the cryptocurrency industry as a whole,” Bons concluded in his critical assessment.
It’s noteworthy that Bybit’s CEO, Ben Zhou, previously voiced similar apprehensions, labeling Pi Network a “scam” and even characterizing it as “more dangerous than meme coins,” adding to the chorus of high-profile critics.
Binance Listing Questioned Amidst Growing Scrutiny
This renewed wave of criticism emerges as Pi Network is facing increasing discontent from its own user base, often referred to as “pioneers,” concerning potential exchange listings, specifically on major platforms like Binance.
Coincidentally, on March 19th, Binance announced the initial projects under consideration for its “Vote to List” program.
The unveiled list included meme-based tokens, including some linked to the former CEO’s pet dog, and the less-known Mubarak (MUBARAK) token, among other projects.
The inclusion of such tokens while Pi Network remains unlisted has seemingly amplified user frustrations and intensified the ongoing debate surrounding Pi Network’s legitimacy.
Also Read:
*Disclaimer*: We at Bitcoinleef.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
Wallets