Sui Network, the Layer-1 Blockchain behind altcoin SUI, is celebrating its first year on the mainnet. This milestone comes amid a period of significant growth for the network, which has emerged as a strong competitor in the decentralized application (dApp) space. But a recent criticism from a prominent venture capitalist cast a shadow over Sui’s celebratory mood, raising questions about the project’s tokenomics and transparency. Here are the details…
In altcoin SUI, most of the supply is held by the founders
While Sui has a limited supply with the 10 billion SUI altcoin project, concerns have been expressed regarding the distribution of this supply. The majority, 52%, is designated as “unallocated” by 2030. However, a staggering 84% of currently staked SUI tokens (over 8 billion) are reportedly controlled by the Sui Network founders themselves.
This high concentration of control raises centralization concerns. Justin Bons, founder of Cyber Capital, points out the discrepancy between Sui’s advertised limited supply and the actual distribution of the tokens. He argues that the lack of lock-up periods for founders’ assets allows extreme flexibility in managing token allocation. This, combined with the lack of legal guarantees for token holders, raises concerns about transparency and accountability.
Is there a lack of clarity in the token economy?
Further fueling these concerns is the lack of clarity surrounding the supply of “unallocated” tokens. Although Sui has announced that it holds its tokens in reputable custodians, the legal ownership of this undistributed share remains unclear. Bons questions whether the foundation or Mysten Labs, the for-profit organization behind Sui, controls this key part.
The token allocation model itself has also come under criticism. Bons criticizes the allocation of large sums to for-profit organizations, early contributors and venture capitalists. He argues that the lack of a public sale and the concentration of share subsidies in the hands of founders who currently control a majority stake undermine the project’s commitment to decentralization.
There is a volume increase in SUI token
These concerns come at a time when Sui is experiencing a surge in trading activity. The SUI token has seen a 100% increase in daily volume despite a slight drop in price at the time of this writing. However, criticism of tokenomics threatens to overshadow this positive development. The Sui Network team has yet to publicly address Bons’ concerns. Going forward, Sui’s ability to address these issues around tokenomics and transparency will be crucial in regaining investors’ trust and ensuring its long-term success.
It remains to be seen whether Sui can meet these challenges and emerge as a truly decentralized platform with a fair and transparent token distribution model. The next year will be critical for Sui to demonstrate its commitment to building a trustworthy ecosystem for both developers and users.
To be informed about the latest developments, follow us Twitter’in, Facebookin and InstagramFollow on . Telegram And YouTube Join our channel.