Sui Network clears up misunderstandings on token supply

According to Sui Network feedback, the Sui Foundation manages the main wallet with locked tokens released strategically to enhance the ecosystem.

Sui Network, a layer-1 decentralized platform, has responded to and corrected common misunderstandings about its token supply. This statement, posted on the X platform, refutes criticisms about its tokenomics, specifically addressing concerns about token distribution and founder control.

The platform maintains that its token economics are sound, utilizing reputable third-party custodians to manage locked tokens. Tokens are released according to a predetermined emission schedule and are publicly accessible. The foundation emphasizes that founders cannot control the treasury or tokens allocated to investors, including the community reserve.

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

Sui Network further explained the distribution of staking rewards circulating in the system. These rewards comprise stake derivatives and network commissions, all of which are returned to the community. This approach is a key aspect of Suis economic model, which aims to maintain balance and fairness.

Despite Sui Network‘s clarifications, Justin Bons from Cyber Capital expressed concerns about the founding team’s token holdings. Bons suggested that the founders may control a substantial portion of staked tokens, posing a centralization risk. This prompted calls for greater transparency and accountability from the networks management, which the Sui team has since addressed.

In contrast, Sui Network disputes this assertion as inaccurate regarding token distribution and management, emphasizing their commitment to transparency. They have disclosed that all tokens, whether distributed or not, are managed in compliance with legal and regulatory standards overseen by reputable custodial services like BitGo, Anchorage, and Coinbase Prime.

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However, Bons challenged the Sui Networks claim of transparency by urging them to accurately represent the status of the allocated stake and demonstrate that the founders cannot move or access it.

Bons emphasized that his critique is motivated by a desire for SUI‘s success. He suggested that misrepresenting these tokens’ status undermines transparency claims and that true transparency requires clear evidence that the allocated tokens are securely held and cannot be manipulated.

In September 2023, Sui Network streamlined Web3 logins for users on its apps with Zero Knowledge login (zkLogin), enabling login via Google, Facebook, and Twitch details. Known for high transaction capacity with low fees since launch. Since its launch, it has built a reputation for handling high transaction volumes while maintaining low fees.