Demystifying Token Supply: Sui Network Sets The Record Straight

Sui Network, a decentralized layer-1 platform, has addressed and corrected misconceptions regarding its token supply. This statement, published on the X platform, rebuts criticisms concerning its tokenomics, particularly focusing on concerns regarding token distribution and founder control.

The platform asserts the integrity of its token economics, relying on trusted third-party custodians to oversee locked tokens. Tokens are released according to a predetermined emission schedule and are publicly accessible. The foundation underscores that founders cannot control the treasury or tokens allocated to investors, including the community reserve.

Per feedback from the Sui Network, the Sui Foundation manages the primary wallet containing locked tokens, which are released under specific conditions to benefit the ecosystem. These allocations support various projects, including developing the Move programming language, network security enhancements, hackathons, and developer grants.

Source: Justin Bons

The Sui Network provided further details on how staking rewards circulate within the system, consisting of stake derivatives and network commissions, all redistributing to the community. This strategy is integral to Sui’s economic model, aiming to uphold balance and equity.

Despite these explanations, Justin Bons from Cyber Capital raised concerns about the founding team’s token holdings, suggesting that they might control a significant portion of staked tokens, which could pose a risk of centralization. This led to calls for increased transparency and accountability from the network’s management, which the Sui team has since addressed.

Transparency Dispute: Sui Network Token Management

In contrast, the Sui Network refutes this claim, asserting that token distribution and management information is inaccurate. They highlight their commitment to transparency, disclose that they manage all distributed tokens according to legal and regulatory standards, and oversee them with reputable custodial services such as BitGo, Anchorage, and Coinbase Prime.

Bons contested the Sui Network’s assertion of transparency, urging them to accurately depict the status of the allocated stake and prove that the founders cannot move or access it.

He emphasized that his criticism stems from a desire for SUI’s success, arguing that misrepresentation of token status undermines claims of transparency. He asserted that true transparency requires clear evidence demonstrating that we securely hold and cannot manipulate the allocated tokens.

In Sept 2023, Sui Network streamlined Web3 logins for users on its apps with Zero Knowledge login (zkLogin), allowing login via Google, Facebook, and Twitch details. Since its launch, it has gained recognition for its high transaction capacity and low fees, maintaining its reputation for efficiently handling high transaction volumes.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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