- SUI token saw significant volatility post-launch.
- The team behind the token worked on Meta’s abandoned crypto project.
- Some traders are questioning the concentration of tokens in VC hands.
The highly-anticipated Sui mainnet launch has sent ripples through the crypto world. The project by a team of former Meta developers garnered significant attention.
Still, massive hype has led to a sudden price drop, while retail traders are questioning VC involvement in this project.
SUI Token Drops, Raises Questions Post-Launch
On May 3, 2023, the Sui Foundation launched the Sui Network, a next-generation Layer-1 blockchain network. Dubbed the Solana-killer, Sui Network benefits from several key technologies developed at Meta.
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Simultaneously, major exchanges, including Binance, listed the token. Despite the hype, SUI dropped more than 70% minutes after launch and is trading near $1.3.
Even at that price, the project has reached a staggering valuation, with a fully diluted market cap of $13 billion. This makes the new project bigger than companies like Hyatt Hotels and Coinbase.
For that reason, some traders have raised concerns over the hype, citing VC control and centralization of the project.
VC Influence and Centralization Concerns
Venture capital firms played a significant role in Sui Network’s early funding. The project by former Meta developers raised $300 million in a Series B round at a valuation of $3 billion. This funding led to concerns over centralization, as early investors held a large share of the tokens.
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One trader pointed out that the Sui Foundation controls 46% of the token distribution. This is significantly more than many other prominent projects.
Some crypto enthusiasts point out that venture capitalist control goes against the decentralized ethos of the crypto space.
Sui Network aims to offer a high-performance, scalable solution for decentralized applications. This positions it as a potential competitor to Ethereum and Solana.
One of the unique features of the Sui project is its programming language, a modified version of Meta’s Move language. The move was originally the programming language for Meta’s abandoned crypto project Diem.
On the Flipside
- Binance Launch enabled users to participate in the SUI token airdrop, offering 40 million SUI for BNB and TUSD stakers. However, due to overwhelming participation, users only got 0.016 SUI for every dollar staked.
- Tron founder Justin Sun moved 40 million USD to Binance ahead of the SUI airdrop. Subsequently, Binance’s CZ called him out, saying he would stop whales from claiming tokens intended for retail traders. Sun said this was a mistake and blamed his team members for it.
Why You Should Care
Decentralization is a core principle of blockchain technology, which seeks to distribute control among a broad network of participants. Venture capital could steer ostensibly decentralized projects in a different direction.
Read about Jack Dorsey’s criticism of venture capital in crypto:Â
Crypto Flipsider News – Dorsey – You Don’t Own Web3
Read about the debate about Solana’s centralization:
‘Centralized’ Solana ‘Solves Nothing’: Dogecoin Founder
