Ready, Set, Launch! PiNetwork Set to Hit MainNet After 2+ Years
A little over two years ago, Pi Network launched with the goal of democratizing cryptocurrency by allowing users to mine on their mobile phone. The founders promises the Pi Network cryptocurrency will launch at the end of 2021, which is only a few weeks away at the time this article is written. The road was not a smooth one and there are still many questions from the skeptics along with someone like me, who is cautiously optimistic. I’ll document the following road bumps along the way to launch, along with news of what is coming ahead.
The First Road Block: Critics Along the Road to Launch
The market is oversaturated with flopped cryptocurrencies. How, do you know if Pi Network is not among one of them? Well, the short answer is: it might or it might not flop. The difference is you are not paying anything upfront (except for 2–30 seconds of your time daily top tap the mine button on the Pi Network app) if it does flop.
Well, for most people, their 2–10 seconds time is quantifiable as money. If 25 million of people use the app, then that adds up.
Thus, many were peeved by the adoption of advertisements popping up on their Pi Network app. This leads to some cynics deducting that Pi Network is making profit on people pseudo-mining.
I believe this not to be the case, because I know Pi Network have about 800k USD in the bank from earlier rounds of fundraising. (I will go into details on where this number come from below). That is a small amount for a start-up, but substantial. The ads revenue is not a the main source of revenue, but enough to alleviate the cost of hosting the mobile app. The next question is, how do the founders keep their project growing?
The Second Road Block: Here Come the Copy Cats
While Pi Network is working in the background to build the application infrastructure, there were copycats popping up such as Bee Network — which mission statement and text seems to copy-paste from the Pi Network language. I have little trust in copy cats, mainly because I do not know who are behind the project and how much capital they have in the project. At least with Pi Network, there are court documents to estimate.
The Last Road Block: Many Still Cannot KYC’ed
To be able to transfer the coins (or convert it to fiat currency) once the Pi Network coin is in the Mainnet, users must verify their identity with the process called Know Your Customer (KYC) through a third party-app called Yoti. When verified last year, I need to use a government-issued ID. The manual upload of documentation was buggy on Yoti, but the verification itself was smooth. Many US and European users have no trouble since owning a driver license or a passport is normal. In other countries, this is a bit more difficult. Initially, there were only 100k of slots going around to KYC and those slots were distributed through a lottery system. The Pi Network developers are testing out community-based KYC process to speed this up once we hit Mainnet. You do not need to have KYC immediately or before Mainnet. You can still mine with or without KYC. You just cannot withdraw the coins for fiat currency.
How Does Pi Network Continue to Sustain Itself?
Financial sustainability is one key to success. Any startup require funding to operate — and I will treat Pi Network as one. To operate, Pi Network needs a mobile app, funding for core developers and operations, and hosting cost for scalable infrastructure. These things add up. Sure the Pi Network does a good job of attracting talent to contribute, but you cannot ask people to work for free forever. One development I see is Pi Network have a LinkedIn profile and job postings. Another key sign of a healthy start-up is cash infusion. The founders have about half a million USD in simple agreement for future equity (SAFE) cash infusion from Stanford incubation in September 2019, along with another 300k in USD in another round for SAFE instruments on February 2020 for about $20 million valuation [1]. These numbers are derived straight from a legal court documents when Vince, one of the three founders left. James Mayo, who did excellent research and use his background as an accountant can provide further analysis on his video.
Scaling the right infrastructure is another key to success. Pi Network is hitting the 25 million users now, but to simultaneously keep its current users and to continue growing, it need to continue to add value as a product differentiator among a crowded field. In the background, Pi Network hosted its first PiCoinvention 2020 [2] to feature a pipeline of upcoming apps in the Pi Network.
Lastly, I’ll leave you all with some updates on the Mainnet features.
A Preview before MainNet
Here are some screenshots on new features on the Pi Network app.
- There is now a new icon for MainNet in the main menu.
2) Selecting the MainNet icon will redirect you to the Mainnet main menu.
3) More information on Unverified Balance:
This is basically the hypothetical balance you earn if all of the people in your earning circle also verified their identity. It is very unlikely that you will actually have the full unverified balance, since you should expect some people in your circle to never KYC.
4) More information on Transferable balance to Mainnet:
This is the actual amount you mined — without accounting for those in your circle that also mined. As more people KYC, some amount from Unverified balance will transfer to Transferable balance.
5) More information Wallet Balance:
I expect that you can move the Transferable balance to Wallet balance after Mainnet. This mean my 2152.56 will be 0 in Transferable balance, while Wallet balance will be 2152.56.
6) More information on Locked balance:
This is actually quite brilliant. If too many users start cashing out when Pi Network launch to Mainnet, it will have two consequences:
- others will buy it off from the sellers and start hoarding the coins, which is not the intention of Pi Network. The intention is to treat it as fiat currency substitution for transactions. The goal is to use PiNetwork coin to buy a cup of latte without the crazy network fees like Ethereum.
- either lead to hyper-inflation or paradoxically, devaluation of the coin.
7) More info on configuring your lockup rate:
The maximum lockup rate is 100% and the maximum duration is 3 years. This means you promise to not freeze from withdrawing from the Wallet in the agreed-upon time. In return, you will have a boost in the mining rate, which is calculated with the equation:
Mining rate boost = Lockup percentage * Lockup duration * log(number of your mining sessions so far)
References:
[1] Mayo, James. Pi Network Lawsuit: Vince Left the Pi Network | Analyzed by an Accountant. https://www.youtube.com/watch?v=L6KP8hwvqNo.
[2] Pi Network. Pi Coinvention of 2020 Full Playlist. https://www.youtube.com/watch?v=kMPv8DrEGCs&list=PL6WUsh24GVC1a5l1uzOBNd6uvO8ebceBE
