Popular crypto exchange Huobi announced Thursday that it would commence the spot trading of Pi, a token for the Pi Network, by 17:00 (GMT+8) on December 29. The development makes Huobi the second cryptocurrency exchange to announce support for the controversial crypto project.
However, a closer look suggests that the PI Network listing on Huobi is not the same as a normal token listing on an exchange. Let’s dive deeper.
What is Pi?
Launched in 2019, Pi Network is a controversial crypto-linked project that supposedly allows users to perform mining operations through their smartphones. The mining process is done by tapping a button on the app every 24 hours.
Users who register and mine on the platform receive the Pi token. However, since its launch, the Pi token has not been tradeable in the crypto market. This has made the token valueless.
Pi Network core developers remain relatively unknown, with many labeling the token as a multi-level marketing (MLM) scheme. Others see it as an effort to mine user data for marketing purposes. Users indeed receive Pi tokens for free but must register on the platform and perform certain actions to earn near-worthless tokens.
Huobi to Open Pi Trading: Is It a Real Listing?
According to the Huobi announcement, the platform will not support deposit and withdrawal functions for the Pi token as part of the listing. This means the millions of users with Pi tokens will be unable to sell them by depositing them on the Huobi platform. The reason is not far-fetched.
There is no Pi blockchain or network for users to transfer the assets to the exchange. Therefore, the Huobi exchange listing for Pi Network is a derivative or synthetic version of the non-existent coin. Users can speculate on Pi’s price while the exchange earns millions in trading fees from uneducated retail investors.
Since users will deposit USDT or other crypto assets to trade Pi Network on Huobi, the listed derivative is simply an I-owe-you (IOU) token for users to speculate on the Pi price.
Huobi says it will enable deposits and withdrawals when Pi finally launches its long-awaited mainnet. In an earlier announcement, Huobi also noted that it would review whether or not it will continue listing Pi tokens when the mainnet eventually launches.
Huobi and XT.COM Lists Pi
Huobi is not the first to make a move towards listing Pi on its platform. Cryptocurrency trading platform XT.COM opened trading on the PI/USDT pair under the same conditions as Huobi (no external deposits or withdrawals). The IoU trades at around $35 at the time of writing.
(Source: XT.com)
Users choosing to trade the synthetic Pi tokens listed on XT.com and Huobi should remain wary of the immense risks and volatility associated with trading synthetic assets.
According to unverified data provider Pi-blockchain.net, the current circulating supply for Pi on its allegedly closed mainnet is 175 million tokens. Given the market price of $35, the Pi token has a market capitalization of $6 billion, making it the 11th largest cryptocurrency.
Update: This article has been updated to reflect Pi’s perceived market capitalization more accurately. An earlier version used a $5 trillion valuation.
