Crypto tokens are a bedrock of any blockchain economy and are critical to a network's security, operation, and growth. SUI tokens serve four key purposes:
- They can be staked to a validator in order to secure the network and earn stake rewards.
- They can be used to pay gas fees to execute transactions and other operations.
- They act as the native asset to facilitate on-chain transactions underpinning the whole Sui economy.
- They give holders the right to participate in future governance.
Usually, as in the case of Sui, a blockchain’s token supply is predetermined and inflexible, and can’t be increased or decreased at will, unlike fiat currency. Decisions on whether the supply will be fixed or unlimited are made prior to a chain’s launch. Sui’s token supply is capped at 10 billion SUI, meaning there will never be more than that many in circulation.
Native tokens are not all released at the genesis of a new chain. Rather an initial portion of tokens are put into circulation for transferring, staking, and holding. Additional tokens are then released on a preset schedule. The tokens available for use in the general marketplace are considered the circulating supply.
By the end of May, the month of Mainnet launch, 5.15% of all SUI tokens were in circulation with the remainder being released on a preset schedule, as shown in the graph below, to maintain network stability. The total supply has been apportioned in a manner to support those who contributed to the launch of Sui Mainnet and ensure its ongoing health through a vibrant, active community. Tokens not in circulation are unable to be used on the network, except for staking purposes, until they are released. Many early contributors to Sui, including individuals who receive tokens through the Community Access Program, received tokens that were subject to a lockup period that is accounted for in the token release schedule.
Recently, on June 27, 2023, a series of 12 tweets implied that the Sui Foundation misrepresented the token emissions schedule for the Sui Network and had disseminated rewards from locked and non-circulating SUI onto Binance.
Sui Foundation investigated these transactions, which revealed that MovEx, who had received 2.5M SUI from the Sui Foundation as payment for its work on DeepBook, and subject to a contractual lockup, had violated the lockup by initiating three transactions of 625K SUI to three unique wallets. The final 625K SUI from the initial transfer remained in the original wallet. MovEx did not make Sui Foundation aware of the three transactions in violation of the contractual lockup, and the Sui Foundation did not consent to them. By July 3, upon Sui Foundation’s request, MovEx had moved the entire allotment of 2.5M tokens to a wallet custodied at a qualified custodian who will release them according to the contractual lockup schedule in compliance with the previously released token emissions schedule.
Following these events, Sui Foundation has terminated its relationship with the MovEx team. No additional SUI tokens will be distributed to MovEx nor will MovEx remain one of the main contributors to DeepBook.
At this time, all other tokens subject to contractual lockups are held in qualified custodian accounts that have agreed to enforce the terms of such lockups.
As Sui grows, the Sui Foundation will continue to contribute to the network as an active community member and to support builders, developers, and end users looking to build the next generation of connected experiences.