Cryptocurrency researcher Justin Bons has issued a stark warning, labeling Pi Network a "straight-up scam" in a detailed public critique. Bons's analysis, shared in an X thread, points to several fundamental flaws in the project's structure and operations.
He criticizes the mobile "mining" feature as a gimmick, arguing it does not contribute to blockchain consensus and functions more like a multi-level marketing (MLM) scheme, where users earn 25% of rewards from referrals. Bons also highlights significant centralization concerns, alleging the core team controls about 20% of the token supply, future mining rewards, and the validator set, which could allow them to influence governance decisions.
Technologically, Bons notes the network's protocol is very similar to Stellar and lacks a Turing-complete virtual machine, preventing the development of smart contracts or DeFi applications. He further criticizes the project's long-delayed mainnet launch and unclear documentation.
The researcher also raised alarms about tokenomics, comparing user token lockups—which increase mining rates—to the model used by HEX, potentially trapping users while insiders benefit. Bons cited a specific incident in 2025 where the PI token price spiked from $0.66 to $1.60 before crashing sharply, alleging insider dumping during the event.
These warnings are echoed by regulators. Chinese authorities reportedly described Pi as a pyramid scheme in 2023, and Vietnamese officials have expressed concerns over its activities and data risks. Bybit founder Ben Zhou has also flagged the project for targeting vulnerable investors.
Despite these allegations, Pi Network's native token, PI, recently experienced a significant price surge. The price jumped up to 16%, reaching a three-month high above $0.23. This rally coincided with two key developments within the ecosystem.
First, the network successfully completed its mandatory V20.2 protocol upgrade on March 7. All node operators must update by March 12. This upgrade is the third stage in Pi Network's progression toward version 23 of the Stellar consensus protocol, with completion targeted for March 14—Pi Day.
Second, the Pi Network team published a proof-of-concept case study exploring a novel use case for its infrastructure. The test demonstrated that the network's over 421,000 active nodes (representing more than one million CPUs) could support decentralized AI training and computing tasks using spare processing power. The team worked with robotics startup OpenMind, backed by Pi Network Ventures, and suggested node operators could receive crypto compensation for such work. The project also highlighted its tens of millions of KYC-verified users as a potential source of human input for AI systems.
From a market perspective, PI broke above a key descending trendline resistance at $0.23. The $0.28 level remains a critical resistance zone, where the price stalled and reversed in Q4 2025. PI currently holds a market cap above $2.2 billion, ranking 40th on CoinGecko, with nearly 21 million tokens unlocked on March 7 and more unlocks scheduled.
