Sui token had a lot of hype around it prior to its launch. However, once the token went live, it immediately fell by around 70%. At press time, the asset had fallen 36.1% in the last 24 hours. Amid falling prices, many have voiced concerns about the amount of SUI tokens being held by market makers. Some believe that market makers were responsible for dumping a lot of SUI tokens upon launch.
According to reports, SUI has given market makers 4% of its overall supply. This results in the circulating supply of tokens increasing by an additional 400 million. However, some argued that the real amount of tokens allocated is closer to 75%.
Furthermore, due to the vesting schedules put in place by exchanges like OKX and Kucoin, the initial public circulation of SUI coins currently stands at about 200 million. As a result, market makers possess a sizable share of the circulating supply. Moreover, market makers have to sell their holdings in order to hedge their option bets.
Is the SUI token safe?
Sui Token has been developed by Mysten Labs. The group is comprised of senior executives and architects from Meta’s now-defunct Novi digital wallet. Being developed by former Meta employees, gives the project a lot of credibility. Moreover, Sui’s creators announced a successful $300 million Series B investment round to bolster development prior to the launch of its mainnet.
However, the hype around the token might just be investors expressing FOMO (fear of missing out). Recently, we saw the hype around Pepe Coin (PEPE) propelling the token by more than 400%. Many investors turned into millionaires with triple-digit investments. However, liquidity issues have kept investors from selling off their PEPE tokens. The sentiment around SUI might be something similar.
Additionally, if the rumors about market makers holding 75% of the supply are true, it could pose a risk of volatility and heavy price corrections. However, it is also possible that the project actually has some solid foundations, and is just off to a rocky start. At press time, SUI was trading at $1.38, down by 0.1% in the last hour.