Let me explain to all the Pioneers what is going on
Refresher: Pi Network is in a closed Mainnet stage. What this means is that the source code of the project is closed & protected with a firewall. This is done by PiCoreTeam to stop exchanges from listing Pi, other people from copying the code, or anything related to the code.
But XT.com, a cryptocurrency exchange a few days back announced that they are going to be listing π coins on their exchange.
A top 10 crypto exchange called Huobi, also made an announcement, stating they are reviewing Pi Network and will “potentially” list after a successful mainnet update.
Surprisingly, they delivered!
With a catch…
- You cannot deposit
- You cannot withdraw
So what’s the point then?
This is what we call: Speculation.
In essence, there is no real Pi traded on these exchanges. What is happening instead is that people are simply betting on the future value of Pi. What they buy or sell on these exchanges are called IOUs, which stand for I Owe You.
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The exchange is saying to the users:
“You can buy “Pi” at whatever the price is TODAY (RIGHT NOW) and once Pi becomes actually tradable, I will send you just as much real Pi.” “You buy 10 “Pi IOU” today, I will send you 10 real π once I can”
Why Exchanges Are Listing Pi
OK – so why do this?
For these exchanges, listing π IOU comes with close to zero downsides or risks. It’s riskier to list a real coin than an IOU. Also, whatever happens until the open Mainnet, they make money from the trading activities going on in their platforms in the form of transaction charges.
What about the risks for customers? (like you or me, who wants to buy/sell)
The biggest drawback is that if you bought these IOUs, you get nothing NOW. What you end up with is a simple promise from the exchange. If you are not confident that the exchange will end up sending those real coins to you, then obviously you shouldn’t risk your money. It is this simple.
Most pioneers are miners, with the intention to sell some of their π. Because they cannot deposit Pi, they are at no risk of losing their coins.
So why is all this happening?
Very simply: there is demand for Pi. People want to buy/sell, exchange wants to make money. So, exchanges make an alternative way to facilitate demand.
IOUs are definitely not for everyone. However, there are 50 million dollars of trade volume every single day right now on these IOU π markets.
Trading began in Huobi at $0.01. – in 15 mins, it was $31. At the highest point, they were valued at $345 per piece.
Most people bought at around the 40-dollar range. A “potential” 35000 X return in less than 24 hours for very few quick individuals, for many it’s a lot less such as a 5 X return, now that the price has settled at 210 dollars.
But there are already people who have lost money on this trade, so it’s not only sunshine! You don’t have to be a mathematician to figure out what’s going on.
This is clearly not what the Core Team had in mind 1 year ago when they launched the closed mainnet.
However, people have waited eagerly for a year since they made that announcement, so to me personally, it is not surprising people are impatient and do their own thing. I overall do not consider this a negative event.
It’s not optimal, but this shows interest and demand for π from the market.
Exchange listings – even IOUs, surprisingly – give the project more exposure to people, so they can learn about or invest in the Pi Network.
Neutral, because optimal would be:
- proper open mainnet
- proper exchange listings
- proper trading
But it’s a start.
I believe there will be other exchanges that will follow the trend.
So, be careful out there, especially if you are new!
What the Core Team Has To Say
But what does the core team has to say about this?
Well, thankfully they alerted the community, updated the website even, and communicated with the moderators, who passed down the message in chats.
