Sui Foundation Denies Selling Locked Staking Rewards on Binance

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The Sui Foundation has denied allegations that it unlocked SUI staking rewards and dumped them on cryptocurrency exchange Binance.

In a five-part Twitter thread on June 27, the team behind the Sui network and its native SUI token renounced the claim, stating that they did not sell any of the locked or non-circulating tokens, including SUI staking rewards.

“The Sui Foundation has not engaged in the sale of staking rewards or any other tokens from locked and non-circulating staked SUI, whether on Binance or any other platform.”

The foundation further emphasized that all insider token allocations are still bound by their lock-up periods and other transfer restrictions, ensuring compliance.

The purpose of this communication is to share information regarding the tokenomics of the Sui Network including the SUI token supply and certain distributions of SUI tokens. Here’s what you need to know:🧵

— Sui Foundation (@SuiFoundation) June 27, 2023

The Sui Foundation responded to allegations made by DeFiSquared, a pseudonymous crypto commentator, in a Twitter thread on June 27. DeFiSquared claimed that the foundation was actively selling rewards obtained from staked SUI tokens locked and non-circulating on the Binance platform.

DeFiSquared alleged that the SUI tokens transferred from the Sui Foundation’s wallet address “0x341f” included 3.125 million out of the total 27 million SUI in staking rewards. These tokens were subsequently sent to three different addresses and eventually to Binance. DeFiSquared argued that these tokens could be unlocked “without restriction,” despite Sui’s claim of a contractual lockup.

Exclusive new research on SUI:

Intentionally misrepresented emissions and proof the team themselves are dumping rewards from *locked* and *non-circulating* staked SUI onto Binance. (1/12) pic.twitter.com/jYRyeTFY56

— DeFi^2 (@DefiSquared) June 27, 2023

SUI Network’s Lack of Transparency in Token Transactions

SUI’s seemingly endless sell pressure piqued the commentator’s curiosity in May.

They criticized the project for failing to publish a separate emissions chart from Binance’s launchpad, which they deemed illegitimate. Moreover, they claimed that the foundation inflates the supply of the SUI token by approximately 20% month-on-month for non-foundation token holders.

“This is higher than the inflation rate of the hyperinflating Venezuelan Bolivar in 2022.”

Most importantly, the commentator discovered that, despite being split numerous times, most funds eventually find their way to Binance.

Sui Foundation has not sold staking rewards or any other tokens from locked and non-circulating staked SUI on Binance or otherwise.

All insider token allocations remain subject to and compliant with their lock ups and other restrictions on transfer.

— Sui Foundation (@SuiFoundation) June 27, 2023

According to Mysten Labs, the creators of the Sui Foundation, Sui’s blockchain is designed to provide users with high transaction throughput at low fees. CoinMarketCap reports show that the SUI token currently has a market capitalization of $427.7 million, with approximately 604 million tokens in circulation. SUI is being traded at $0.70 as of publication, reflecting a 2.4% decrease in the past 24 hours.

Additionally, Token Unlocks, a tokenomics dashboard, indicates that the next unlock of 61 million tokens (equivalent to $43 million) is scheduled for June 3.

Soon we will publish a detailed projection of the token release schedule, and will share that link immediately upon publication.

— Sui Foundation (@SuiFoundation) June 27, 2023

The Sui Foundation has announced its intention to release a “detailed projection” of the token release schedule in the near future.

CertiK Discovers Critical Attack Vector on Sui Network

Over a week ago, the Sui Foundation awarded $500,000 to the smart-contract audit firm CertiK for discovering a potential attack vector on the Sui network.

CertiK found an infinite loop bug in the Sui code that a malicious smart contract could trigger, causing the network’s nodes to enter an endless circle and effectively paralyze the network.

In a press release on Monday, CertiK stated that the HamsterWheel attack, unlike traditional attacks that shut down chains by crashing nodes, traps all nodes in a state of ceaseless operation without processing new transactions, as if they were running on a hamster wheel.

This strategy can cripple entire networks, effectively rendering them inoperable.

“The HamsterWheel attack distinguishes itself from conventional attacks that disable blockchain networks by causing nodes to crash. Instead, it confines all nodes in a perpetual state of activity where they are unable to process new transactions, akin to running on a hamster wheel.”

According to the Sui Foundation, CertiK has confirmed that it has already rolled out fixes for the bug and has promised to publish a full technical report later.

Darius Goore, head of communications at Sui Foundation, expressed his satisfaction, stating, “We are extremely pleased that the program resulted in finding and fixing this bug well before Sui went live.” He added, “The first six weeks of Sui mainnet have been remarkably smooth from an operational and security perspective, thanks to the bug bounty program, robust third-party audits, and thorough internal testing.”

In a written statement, CertiK’s chief security officer, Kang Li, emphasized the evolving sophistication of threats to blockchain networks, stating, “The discovery of the HamsterWheel attack demonstrates the evolving sophistication of threats to blockchain networks.”