Layer-1 blockchain Sui Network took to X to clarify the misconceptions and misunderstandings surrounding its tokenomics. The network came under some criticism recently with top industry players voicing their concerns over the tokenomics employed by Sui Network. However, SUI says its tokenomics are sound.
Sui Founders Have no Control Over Token Allocation
It claims to employ reputable third parties for its token storage and releases tokens according to a predetermined schedule. Oftentimes, these schedules are made public and accessible. Hence, founders can’t control the treasury or tokens allocated to investors, including the community reserve.
Furthermore, it was stated that the Sui Foundation is tasked with managing the primary wallet that holds locked tokens. These locked tokens are later released under specific conditions to support different projects, including Move programming language development, network security enhancements, hackathons, and developer grants.
Sui Leverages Third-parties For Token Distribution
Sui also stated that staking rewards are a mix of stake derivatives and network commissions. In the long run, both of them are returned to the Sui community. The Sui Network further refuted the claims previously made by Cyber Capital founder Justin Bons.
Precisely, the Layer-1 blockchain noted that it has revealed that all tokens, whether distributed or not, are managed in compliance with legal and regulatory standards overseen by reputable custodial service providers like BitGo, Anchorage, and Coinbase Prime.
Justin Bons Raises Concerns About Sui Tokenomics
Despite its unique design, Justin Bons highlighted significant issues with the token’s supply dynamics.
For context, he pointed out that 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. According to Bons, this concentration of supply poses a centralization risk.
Moreso, it is compounded by the absence of lock-ins and legal guarantees for token holders. In his opinion, this lack of lock-ins affords the founders considerable flexibility to manage the token distribution. Consequently, this questions the transparency and integrity of the SUI ecosystem
Armed with these details, Bons claimed that there are discrepancies between SUI’s claims and its actual token distribution. This caused him to label the foundation’s published chart as misleading
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