Judging from user growth and the progress of mainnet launch, the current number of global active miners of Pi Network has exceeded 35 million, and the daily active users are approximately 8 million. If its mainnet is launched as scheduled by the end of 2024, referring to the case of the 88% reduction in Gas fees after the Ethereum 2.0 merge, which led to a 250% monthly increase in on-chain transaction volume, the initial circulation of the native token pi coin within the pi ecosystem may be controlled within the range of 15% to 20% of the total supply of 25 billion coins. The technical white paper shows that its Stellar Consensus Protocol (SCP) can achieve a single-second confirmation speed, which is much higher than the average 600-second confirmation delay of Bitcoin. Combined with the current KYC authentication completion rate reaching 73%, the number of decentralized applications (Dapps) is expected to exceed 5,000 within 12 months of the mainnet launch. Reach the 2023 level of the Polkadot ecosystem (the current total number of Dapps is 4,502).
The conversion efficiency of practical application scenarios has become the core value. During the testnet phase, 6.3 billion simulated transactions have been generated on the Pi chain, and the number of merchants connected to the Pi browser has reached 120,000, covering high-frequency consumption fields such as e-commerce and tourism. If the official website can replicate AlipayHK’s experience of expanding 800,000 physical merchants in 2023 and combine it with its zero-transaction fee model (compared to Visa’s average payment rate of 1.5%), pi coin’s payment penetration rate may reach the average of 18% in the Southeast Asian e-wallet industry by 2025. It is particularly worth noting that the supply chain finance solution jointly developed by Pi Ecosystem and IBM has completed a pilot project in the automotive parts industry, successfully shortening the traditional 180-day payment period to 7 days. If this technology covers 2% of global trade volume by 2025, it will directly create an annual settlement demand of 12 billion US dollars.
The process of regulatory compliance will directly affect market access. The Financial Action Task Force (FATF) Travel Rule now covers 128 countries around the world, requiring all cryptocurrency exchanges to verify the information of both parties involved in a transfer. The core team of Pi has obtained the pre-approval of the VASP license granted by Swiss FINMA. If they complete the layout of 50 global licenses similar to Coinbase’s by 2025 (Coinbase currently holds 49 compliant licenses), it will unlock the channel for institutional investors – referring to the scale of BlackRock’s Bitcoin ETF raising 3.2 billion US dollars in its first week of listing. A conservative estimate suggests that compliant pi coin service providers can introduce at least 5 billion US dollars in incremental funds. Conversely, if a policy similar to India’s 2023 mandatory data localization for Web3 wallets occurs (resulting in a 30% user loss), the user growth rate in the Asia-Pacific region may slow down from the current average monthly rate of 5.3% to 1.8%.
The macroeconomy and competitive landscape need to be incorporated into dynamic models. The Fed’s dot plot indicates that the benchmark interest rate may fall back to 3.25% in 2025. According to the strong -0.7 correlation between the Bloomberg Cryptocurrency Index and interest rates, this will be beneficial for the valuation of tokens. However, there are currently 480 payment tokens in the market. Among them, XRP has occupied the banking systems of 170 countries with its cross-border payment solution, while Pi needs to compete for at least 15% of the cross-border payment market share by 2025 (about 1/50 of the average daily transaction volume of 600 billion US dollars in the Swift system) to support its valuation model. Combining the historical cycle pattern – the total number of applications of Apple App Store increased by 9,000 times within three years after its launch in 2009, creating an industry miracle. If Pi Mall can achieve a daily transaction volume of 500 million US dollars by 2025 (the current average daily transaction volume of the testnet is 700,000 US dollars), then the circulating market value of pi coin has the opportunity to reach 25 billion US dollars. The expected range of the converted unit price is 30 to 80 (the current over-the-counter trading price on the testnet is approximately $0.08), and the annualized volatility (standard deviation) is expected to be between 35% and 60%. It is necessary to be vigilant against industry events like PayPal’s stablecoin listing, which led to a 24% single-day drop in competing coins, impacting the development of the Pi ecosystem.