Sui once again denies allegations of "opacity" in tokenomics

Sui asserts it maintains its original tokenomics and full transparency in token issuance and allocation.

Sui once again denies allegations of "opacity" in tokenomics. Photo: CoinDesk

The source of the controversy
Justin Bons, co-founder and CIO of Cyber Capital, has accused Sui of lacking transparency in managing its tokens.

Bons alleges that Sui's founding team significantly controls the amount of staked tokens, threatening the decentralized nature and demanding clarification from Sui. Justin Bon expressed his confusion:

"SUI is capped at 10 billion supply, with 52% not allocated until 2030. Yet currently, over 8 billion SUI is staked. So are the project founders controlling 84% of the staked supply or what???"

Representatives from Cyber Capital further revealed that out of the total 10 billion SUI:

• 160 million tokens went to Mysten Labs;
• 600 million tokens were allocated for "early contributions";
• 1.5 billion tokens went straight to VC wallets;
• 1 billion tokens, under the guise of "stake subsidiary," ultimately returned to the founders.

It turns out that a significant portion of SUI tokens are not only "freely released" but also controlled by a single project entity.

Sui's response to the accusations
In a statement on May 5th, Sui refuted criticisms surrounding its tokenomics and token allocation. They affirmed that SUI was distributed according to a predefined schedule and that Mysten Labs does not control the treasury of Sui Foundation, nor the allocation for investors and the community.

Furthermore, Sui emphasized that Sui Foundation manages locked token wallets and only unlocks them under specific conditions. For instance, tokens are needed to support projects, develop the Move programming language, enhance network security, sponsor hackathons, and support developers.

Sui declared that staking rewards, including profits and commission fees, belong entirely to the community.

"100% of staking rewards earned by Sui Foundation will be allocated to the community and detailed in a public release schedule."

However, this isn't the first time this billion-dollar project has clashed with the community. In June 2023, Sui faced criticism for "selling staking rewards" on Binance, despite explanations that have yet to fully convince public opinion.

Last weekend, Sui was even credited with surpassing Solana in transaction activity, becoming one of the most utilized blockchains. However, according to Artemis' findings, much of Sui's transaction activity stemmed from a "transaction spam" frenzy.

Total transactions on the Sui network in the past 30 days. Source: suiscan

Originating from a dApp named Spam Sui, the "Spam-to-Earn" concept incentivized users to engage in transactions on the network to receive SPAM tokens. Over 65 million transactions were generated involving 65,000 participants. Hence, it's premature to conclude whether Sui has dethroned Solana or not.