This “Insider” Practice By Crypto Projects Like Aptos And Celestia Is Unfair
Omid Malekan, an author and professor at the Columbia Business School, has raised concerns about a tokenomics practice employed by newly launched layer-1 blockchains such as Aptos and Celestia. Malekan argues that allowing insiders with locked tokens to stake and earn rewards is unfair to retail token holders who must pay full price for the assets. Insiders, often early adopters who obtained tokens at discounted prices, have an advantage and can become whales in the market. Malekan is particularly critical of insiders being able to sell their staking rewards immediately, which he sees as a backdoor unlock that allows privileged insiders to profit at the expense of ordinary users.
Malekan advises upcoming and existing platforms to adjust their tokenomics strategy to prioritize long-term sustainability and fairness for all token holders rather than rewarding insiders and early investors.
SEC And Other Regulators May Soon Step In
If projects like Aptos and Celestia fail to address these concerns, Malekan warns that regulators like the US Securities and Exchange Commission (SEC) may intervene. While the SEC has been cautious in its approach to altcoins other than Bitcoin, there is a possibility that these projects could be classified as securities rather than commodities. This classification could have significant implications for staking and network security. Gary Gensler, the chairman of the SEC, has refrained from clarifying whether Ethereum is a security or a commodity like Bitcoin.
Hot Take: Tokenomics Practices Must Prioritize Fairness and Sustainability
The tokenomics practices employed by projects like Aptos and Celestia, which allow insiders with locked tokens to stake and earn rewards, have come under scrutiny from Omid Malekan, an author and professor. Malekan argues that this practice is unfair to retail token holders who must pay full price for the assets, while insiders receive tokens at discounted prices. He also raises concerns about insiders being able to sell their staking rewards immediately, profiting at the expense of ordinary users. Malekan emphasizes the need for upcoming and existing platforms to prioritize fairness and sustainability in their tokenomics strategy. Failure to do so may result in regulatory intervention from agencies like the SEC, which could classify these projects as securities rather than commodities.
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