Justin Bons criticizes Sui Networks‘ token economics, pointing out that its founders own 84% of the token supply.
Sui Network is now commemorating the anniversary of its mainnet debut.
In the past year, the Sui Network has evolved from an emerging ecosystem to a formidable Layer-1 decentralized platform.
Earlier this week, Sui Network partnered with Google Cloud to advance its AI and Web3 initiatives.
However, Cyber Capital’s founder Justin Bons has recently expressed skepticism regarding sui Network’s tokenomics, with a very large concentration in the hands of the network’s founders.
Sui Network Founders Hold 84% Control
Justin Bons recently presented a critique that highlighted concerns regarding the token economics of SUI.
Even with the token’s auspicious design, Bons brought to light notable concerns regarding its supply dynamics.
SUI advertises a capped supply of 10 billion tokens, with 52% marked as “unallocated” until 2030.
However, the current quantity staked surpasses 8 billion tokens, and the founders control an astounding 84% of the staked supply.
Combined with the lack of lock-in provisions and legal guarantees for token holders, this concentration of supply creates a centralization risk.
Bons portrayed the foundation’s published chart as deceptive, emphasizing the disparity between SUI’s assertions and its actual token distribution.
His statement that the founders have significant flexibility in managing token allocation due to the absence of lock-ins raises concerns regarding the transparency and integrity of SUI’s communication.
Founders Should Come Clean and Transparent
Bons also highlighted concerns over the lack of transparency surrounding SUI token distribution and ownership.
Despite requests for disclosure, SUI declined to furnish comprehensive details regarding token addresses, thereby giving rise to inquiries regarding the project’s accountability.
Although BitGo, Anchorage, and Coinbase Prime are among the custodians holding SUI’s tokens, the lack of clarity concerning the legal ownership of the “unallocated” supply remains a substantial concern.
Bons emphasized the uncertainty surrounding whether the foundation or the for-profit entity, Mysten Labs, controls this stake, emphasizing the need for further disclosure from the Core team.
Bons expressed disapproval regarding the distribution of project funds, specifically highlighting significant amounts allotted to for-profit organizations, early backers, and venture capitalists.
The individual conveyed their discontent regarding the absence of a public offering and voiced apprehensions regarding the consolidation of stake subsidies among the founders, who already possess the majority ownership interest.
Concerning the “unallocated” supply, the lack of transparency and the alleged avarice in SUI’s token distribution model prompted Bons to denounce the project’s practices and advocate for increased accountability and ethical standards in crypto-economics.
Daily transaction volumes of SUI, the native cryptocurrency of the Sui Network, have increased by 100%.
As of press time, the SUI price is down 1.44% to $1.09, with a market capitalization of $2.54 million.
