SUI Price Plunges 65% After Over 3 Months of Mainnet Launch, Community Reserve Sell-off Recorded
Since its launch in early May, the SUI token has experienced a steep decline from its peak of $1.4 USD to just $0.5 USD at present.
SUI Price Plunges 65% After Over 3 Months of Mainnet Launch, Community Reserve Sell-off Recorded
According to The Block Research Director Steven Zheng, one of the primary reasons for SUI's unprecedented price drop, despite being on mainnet for just over three months, stems from a sell-off originating from the Community Reverse — a community reserve fund allocated 50% by Sui.
Per tokenomics, this reserve managed by the Sui Foundation is intended for distribution among builders, researchers, validators, and others through various programs.
Market capitalization of SUI has also drastically decreased from a high of $740 million USD to as low as $343 million USD on August 18. This decline may affect initial investor contributions, expected to be repaid by June 2024, falling short of expectations. Nonetheless, Zheng noted early investors could still pocket millions.
According to Token Unlocks, Sui will regularly unlock approximately 61 million SUI per month until October 2023, before doubling its supply from 861 million to 1.9 billion SUI in November.
SUI Unlock Schedule. Source: Token Unlocks
Since its listing on Binance, the Sui ecosystem has yet to demonstrate substantial development. Moreover, the billion-dollar project faces scrutiny over its tokenomics, particularly after the Sui team was found selling received SUI tokens under locked staking tokens on Binance.
Furthermore, the Sui network has been found with security vulnerabilities, potentially risking blockchain downtime, as reported by CertiK. Additionally, several projects within this ecosystem have announced migrations to other blockchains, acknowledging instability within Sui.
Less than a year ago, Mysten Labs, the entity behind Sui development, successfully raised $300 million USD, valuing Sui at $2 billion USD. The funding round included FTX Ventures and a16z, although Mysten later bought back FTX's shares.
Upon entering the field, Mysten Labs was touted as a gathering of engineers from Meta, formerly known for their work on the viral stablecoin Diem. However, assessing Sui's current state, it appears the project's quality cannot solely rely on the founders' reputation.
