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Brief summary
On December 18, 2025, Pi Network announced a major update to its Decentralized Exchange (DEX) and Automated Market Maker (AMM) features on the Testnet. The updates, based on testing and user feedback, are designed to improve usability, transparency, and align tokens with creating real value.
Pioneers,
We are just days away from 2026, the year of the open mainnet. The energy in the ecosystem is palpable right now. While many are enjoying the holidays, the development teams and community are working harder than ever to ensure a smooth transition to a fully open economy.
Today we have two major updates: a report on the status of key financial network security (DEX/AMM) and an ongoing report on our extensive Christmas trading initiative.
Key changes include four main areas:
- User interface improvements: Design adjustments simplify navigation and make DeFi tools easier to understand for users (Pioneers).
- Pi-focused liquidity organization: All liquidity is now organized in pairs with Pi as the underlying asset, which concentrates liquidity, increases its efficiency, and reduces volatility.
- Domain verification as an indicator of trust: Token issuers are now required to link their tokens to a verified domain, giving users another tool to assess the trustworthiness of a project.
- Token rating by liquidity: A new ranking system has been introduced that ranks tokens by the volume of liquidity in their pool instead of market capitalization to prevent price manipulation and artificial inflating of value.
In parallel with the technical updates, a community initiative was launched "Holiday Commerce Event", which aims to support real commerce and small businesses in the Pi ecosystem during the holiday season.
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Pi's Upgraded DEX Trading Experience [Infographic][English]
Pi DEX and AMM Testnet Improvements [Infographic][Czech]
1. Objectives and Context of the Updates
Updates to the DEX and AMM features on Pi Testnet have been implemented based on initial usage, testing, and community feedback. These changes are guided by several key goals:
- Aligning tokens with real-world utility: Support the creation of tokens that have real value and practical uses.
- Increasing the practical use of Pi: To facilitate and support the use of Pi within decentralized finance.
- Improving user-friendliness and transparency: To make DeFi tools accessible to the wider community and increase the clarity of their functioning.
The main purpose of these tools in the Testnet environment remains community education and preparation. The goal is to familiarize users (Pioneers) with DeFi tools and features, improve their financial literacy, and provide a safe environment for experimenting with decentralized exchange and liquidity pool mechanisms using Test-Pi test coins.
2. Key Changes in Pi DEX and AMM
The update focuses on four main pillars that together reshape the user experience and functionality of the platform.
2.1 Improved User Interface and Organization
User interface (UI) adjustments have been made to improve overall clarity and simplify navigation. These changes are intended to reduce barriers for new users and make it easier to understand how to work with the DEX and AMM features. There is also a new how-to video that demonstrates the updated interface and explains how these DeFi tools work.
2.2 Pi-Focused Pairing and Liquidity Organizations
The most significant change is the reorganization of liquidity, which is now structured exclusively around pairs denominated in Pi. Pi serves as the common underlying asset for all trading on the DEX.
- Principle: This approach, where the most liquid currency is used as the underlying asset, is a proven practice in many ecosystems.
- Target: Instead of fragmenting liquidity into many small and inactive pools, it is concentrated into a smaller number of larger and more active pools, making existing liquidity more efficient for trading.
- Practical impact: If both token A and token B have a trading pair with Pi, their mutual exchange rate can be easily and transparently derived.
This liquidity organization model brings several potential benefits:
- Lower price volatility: Individual trades have a smaller impact on the price of tokens.
- Reduced slippage: Trade results are more predictable.
- Greater resistance to manipulation: The capital needed to influence the market is increasing.
- More reliable pricing: Especially with the increasing volume of trades.
This change is being implemented as an experiment and will be further evaluated based on usage data.
2.3 Domain Verification as an Indicator of Trustworthiness
A new mechanism has been introduced to help users better assess the trustworthiness of tokens. Previously, a token was only associated with an address on the blockchain, which is difficult for most users to interpret.
- New Feature: Token issuers are now required to link their tokens to a verified domain, so users can easily verify that the token is actually issued by the entity that controls the relevant web domain.
- Warning: This feature does not guarantee that the token is secure or trustworthy. It only serves as an additional information signal to help identify possible fraudulent claims. The responsibility for deciding what to trust remains entirely with the user.
2.4 Liquidity-Based Token Rating System
Pi Network is testing a new token ranking system in the DEX interface that prioritizes liquidity over market cap.
| Metrics Rating | Description and Risks/Benefits |
|---|---|
| Market Capitalization (Market Cap) | Calculation: Token Price x Circulating Supply. Risk: Susceptibility to manipulation. The issuer may hold most of the supply (e.g. 99%), release only a small amount into circulation, and artificially inflate the price. This inflates the market capitalization and makes the project appear more valuable than it actually is. |
| Liquidity | Calculation: The amount of liquidity (measured in Test-Pi) actively invested in the token pool. Advantage: It reflects the actual capital commitment. To increase the rating, the token must attract additional liquidity, which is significantly more expensive and difficult to manipulate. Moreover, the rating is automatically updated with changes in liquidity. |
This system is currently in the testing phase and may be further developed based on the data and feedback received.
3. Holiday Commerce Event
In addition to technical updates, Pi Network is organizing a community shopping initiative aimed at promoting real-world trading in the ecosystem.
- Target: To highlight merchants accepting Pi and encourage users to shop with Pi, both online in apps and at local merchants.
- Mechanism: Merchants can create and promote their own holiday events on the Pi platform. Users have an easy way to discover, shop, and share their experiences with these businesses.
- Benefit: The initiative supports small businesses, real-world use of Pi, and active community involvement in the ecosystem.
DeFi Otherwise: 3 Surprising Updates on the Pi Testnet You Need to Know
The world of decentralized finance (DeFi) is often perceived as complex and risky for newcomers. Amidst this complexity, Pi Network is introducing its experimental Testnet DEX as a project with a different philosophy – focused on user-friendliness and education. The goal is to make DeFi tools accessible to a wider audience in a safe environment. This article focuses on three of the most significant and surprising updates that reveal this unique approach.
1. Liquidity Above the Hype: Why Pi Ranks Tokens Differently
Most of the cryptocurrency world ranks tokens by “market cap.” However, this metric can be easily manipulated. For example, imagine a developer holding 99% of the total supply of their token and releasing only 1%. By artificially increasing the price of this small percentage, they can dramatically inflate the market cap, creating the illusion of a project being much more valuable than it actually is.
Pi comes up with a different solution: a ranking system based on liquidity, specifically the amount of Test-Pi tied up in a given token’s pool. Pi Network believes this is a much more informative metric (more informative metric) rather than market capitalization. This approach reflects the actual capital commitment and is significantly more difficult to manipulate. A token can only rise in the rankings by attracting additional real liquidity, not by artificially inflating its price. This seemingly counterintuitive choice demonstrates a focus on creating a more authentic and tamper-resistant ecosystem for users.
2. All Roads Lead to Pi: The Power of Central Pairing
Liquidity on the Pi DEX is now organized around Pi-denominated pairs, making Pi the central asset for all trades. This move addresses the common problem of fragmented liquidity across multiple “thin pools,” where small trade volumes can cause large price swings. Moreover, this model is not just Pi’s invention—the choice of the most liquid asset as the basis reflects best practices (mirrors best practices) introduced in the wider DeFi world.
By concentrating liquidity around Pi as a common base, available liquidity becomes more efficient. This model brings with it four key benefits:
- Lower price volatility of DEX tokensbecause individual stores have less impact on prices.
- Reduced slippage, leading to more predictable trading results.
- Greater resistance to manipulation due to the increase in costs needed to influence the market.
- More reliable price discovery, especially with increasing business activity.
This structural decision aims to create a more stable, predictable, and efficient trading environment for Pioneers experimenting on the Testnet.
3. More than just an address: Building trust with verified domains
To the average user, a token is often just a long, obscure address on the blockchain that is difficult to verify or trust. Pi solves this problem with a new feature: token issuers can now associate their tokens with verified domain names. This makes it easier for users to check whether a given token is actually associated with a legitimate project or business.
However, it is crucial to emphasize one nuance: this verification is not guarantee that the token is safe. The platform's mission is to provide users with clearer and more accessible signals (clearer and more accessible signals) to help them make their own, more informed decisions. The ultimate responsibility for what to trust remains with the user. This feature is a practical step towards empowering users and increasing transparency in an area where fraud is common.
Conclusion: A roadmap for user-centric DeFi?
These three updates—liquidity scoring, centralized Pi pairing, and domain verification—are not just random changes. They form a coherent strategy that transforms Testnet DEX into an educational ecosystem. The goal is not just to simplify use, but to actively educate users, improve their financial literacy, and allow them to experiment safely. By moving away from metrics that are prone to manipulation and focusing on practical usability and clarity, Pi paves the way for a less intimidating entry into decentralized finance.
As Pi continues to build its ecosystem on these principles, could this emphasis on usability and security become the new standard for how everyday users are introduced to the world of decentralized finance?
The combination of a compatible, high-speed DEX preparing for launch and a community actively demonstrating the currency's utility this holiday season gives us unprecedented momentum.
Enjoy the holidays, keep transacting, and get ready. 2026 will be historic.
Pi Core Team
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