Sui Network is currently celebrating the one-year completion of its mainnet launch. Over the last year, the Sui Network has emerged from a nascent ecosystem to a formidable Layer-1 decentralized platform. Earlier this week, Sui Network also partnered with Google Cloud in order to enhance its AI and Web3 initiatives. However, Cyber Capital founder Justin
The post Sui Network Tokenomics Raises Concerns With 84% Control of the Founders appeared first on CoinGape.
Sui Network is currently celebrating the one-year completion of its mainnet launch. Over the last year, the Sui Network has emerged from a nascent ecosystem to a formidable Layer-1 decentralized platform. Earlier this week, Sui Network also partnered with Google Cloud in order to enhance its AI and Web3 initiatives. However, Cyber Capital founder Justin Bons has recently his doubts over the tokenomics employed by sui Network with a very large concentration in the hands of its founders.
Sui Network Founders Have 84% Control
In a recent critique by Justin Bons, concerns were raised regarding the token economics of SUI. Despite its promising design, Bons highlighted significant issues with the token’s supply dynamics.
SUI advertises a capped supply of 10 billion tokens, with 52% designated as “unallocated” until 2030. However, the current staked amount exceeds 8 billion tokens, with a staggering 84% of the staked supply controlled by the founders. This concentration of supply poses a centralization risk, compounded by the absence of lock-ins and legal guarantees for token holders.
1/16) SUI has a great design, except for its token economics:
SUI claims to have a capped supply of 10B, with 52% being “unallocated” till 2030
The problem is that over 8B SUI is being staked right now!
Over 84% of the staked supply is held by founders! SUI is centralized:
— Justin Bons (@Justin_Bons) May 2, 2024
Bons emphasized the discrepancy between SUI’s claims and its actual token distribution, labeling the foundation’s published chart as misleading. He asserted that the lack of lock-ins allows the founders considerable flexibility in managing the token allocation, raising concerns about the transparency and integrity of SUI’s communication.
Founders Should Come Clean And Transparent
Bons further expressed concerns over the lack of transparency surrounding SUI’s token distribution and ownership. Despite demands for disclosure, SUI declined to provide detailed information on token addresses, raising questions about the accountability of the project.
While SUI disclosed that its tokens are held by custodians such as BitGo, Anchorage, and Coinbase Prime, the absence of clarity regarding legal ownership of the “unallocated” supply remains a significant issue. Bons highlighted the uncertainty surrounding whether the foundation or the for-profit entity, Mysten Labs, controls this stake, underscoring the need for further disclosure from the Core team.
Bons criticized the allocation of funds within the project, citing substantial portions allocated to for-profit entities, early contributors, and venture capitalists. He expressed dismay over the lack of a public sale and raised concerns about the concentration of stake subsidies in the hands of founders who already control the majority of the stake.
The absence of transparency and the perceived greediness in SUI’s token distribution model, particularly regarding the “unallocated” supply, prompted Bons to denounce the project’s practices, calling for greater accountability and ethical standards in crypto-economics.
SUI, the native cryptocurrency of the Sui Network has registered a 100% surge in daily trading volumes. As of press time, the SUI price is trading 1.44% down at $1.09 with a market cap of $2.54 million.
The post Sui Network Tokenomics Raises Concerns With 84% Control of the Founders appeared first on CoinGape.
