Big Concern For That Altcoin _: Most Of The Founders Are In Control!

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 is emerging as a strong contender in the decentralized application (dApp) space. However, a recent criticism by a prominent venture capitalist has overshadowed Sui's celebratory mood, raising questions about the project's tokenomics and transparency. Here are the details...

Most of the supply in altcoin SUI is in the founders

Although Sui has a limited supply of 10 billion SUI altcoin project, concerns have been raised about the distribution of this supply. A large proportion, 52%, were 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.

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

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 tokens. He argues that the lack of lock-up periods for founders' assets allows for excessive flexibility in managing token allocation. This, coupled 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 disclosed that it holds its tokens in reputable custodians, the legal ownership of this undistributed stake remains unclear. Bons questions whether the foundation or Mysten Labs, the for-profit organization behind Sui, controls this important part.

volume rise 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, although there has been a slight fall in price at the time of writing. However, his 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 resolve these issues related to tokenomics and transparency will be crucial in regaining investors' trust and ensuring long term success.

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