Pi Network’s node concentration in Vietnam, nearly 50%, sparks decentralization concerns amid tightening crypto regulations, threatening long-term stability.
The Pi core team’s significant control over most of the Pi Coin (PI) supply has increased concerns.
Is Pi Network’s Future at Risk?
Data from Piscan shows that Vietnam hosts 154 out of 319 global nodes, making up 48.2% of the total. At the time of reporting, 33 of the 76 active nodes were also based in Vietnam, further emphasizing the country’s prominent role in the network.
Additionally, the Pi Network currently operates with only two validator nodes controlled by the core team. This represents a major centralization concern, leading many to question the network’s integrity.
The heavy concentration of watcher nodes in Vietnam further intensifies concerns about fairness and decentralization, as it raises the possibility that users in one country could exert excessive influence over the network’s operations.
Vietnam’s legal stance complicates the situation. According to local law, virtual currencies such as Pi Coin are not recognized as legal non-cash payment methods. Authorities may impose fines on individuals who use Pi Coin for transactions.
“Any individual or organization using cryptocurrency, including Pi Coin, for payment transactions will be subject to penalties under Article 26, Clause 6 of Decree 88/2019/ND-CP, as amended by Clause 15, Point d of Article 1 of Decree 143/2021/ND-CP (with fines ranging from 50,000,000 VND to 100,000,000 VND) or could face criminal prosecution under Article 206,” the authorities wrote in March post.
The country’s cautious attitude is reflected in legal notices warning about the risks associated with Pi Network. In 2023, Vietnamese authorities investigated the project, citing concerns regarding its business practices.
In addition, Vietnam’s Ministry of Finance has proposed new rules to tighten crypto oversight, limiting custody services to licensed institutions. This proposal underscores the need for stronger regulation to ensure transparency, security, and legal compliance within the country’s cryptocurrency landscape.
If enacted, the proposed regulation could affect local miners, potentially disrupting the Pi Network’s infrastructure.
Another issue is the token distribution. According to PiScan, the Pi Foundation’s wallets hold more than 60.7 billion Pi out of the 100 billion total supply.
Such a high level of centralization contradicts the core principles of decentralization that cryptocurrencies are meant to uphold.
“So long as the team holds some coins, it will never be decentralized,” a user wrote on Reddit.
Furthermore, a recent report claims that a Pioneer has accused the core team of insider selling, further damaging the network’s credibility.
Addressing these structural weaknesses for a project that promotes itself as a decentralized, user-led ecosystem will be vital to preserving trust and ensuring long-term viability.
