Crypto partnerships, a common strategy for resource sharing and growth acceleration, often involve token exchanges. However, if not managed carefully, complexities can arise, such as unauthorized sales of a partner’s native tokens. This breach can significantly impact both parties involved. In a surprising turn of events, Sui Network, a leading player in the blockchain industry, announced the termination of its partnership with MovEx. The decision comes after MovEx allegedly sold 625,000 Sui tokens, a move that Sui Network claims is a clear breach of their contract.
MovEx Made Sui Transactions Without Notifying
On June 27, 2023, the Sui community was stirred by a series of 12 tweets suggesting that the Sui Foundation had misrepresented the token emissions schedule for the Sui Network. The tweets also implied that rewards from locked and non-circulating SUI tokens had been improperly transferred onto Binance.
In response to these allegations, the Sui Foundation made an investigation into the transactions. The probe revealed that MovEx, a partner who had received 2.5 million SUI tokens from the Sui Foundation as compensation for its work on DeepBook, had breached the contractual lockup agreement.
MovEx initiated three separate transactions, each involving 625,000 SUI tokens, to three distinct wallets. The remaining 625,000 SUI from the initial transfer were left untouched in the original wallet.
MovEx did not inform the Sui Foundation about these transactions, which were in clear violation of the contractual lockup agreement. Furthermore, the Sui Foundation clarified that it did not give its consent to these transactions.
By July 3, following the Sui Foundation’s intervention, MovEx had transferred the entire allotment of 2.5 million tokens to a wallet overseen by a qualified custodian. This custodian will now release the tokens according to the original contractual lockup schedule, in line with the previously announced token emissions schedule.
In light of these events, the Sui Foundation has decided to sever its ties with the MovEx team. Consequently, MovEx will not receive any additional SUI tokens, nor will it continue to be one of the main contributors to the DeepBook project.
Sui Network’s DeepBook Takes A Hit
In a typical crypto partnership, projects often exchange their native tokens as a sign of mutual trust and commitment. These tokens, usually held in the form of escrow, are meant to be used for specific purposes outlined in the partnership agreement, such as development, marketing, or liquidity provision. Unauthorized sales of these tokens not only breach the contract but also undermine the trust and integrity that form the foundation of these partnerships.
Blockchain tokens like Sui have a fixed supply, with Sui’s capped at 10 billion. Tokens are not fully released at launch but gradually to maintain network stability. By the end of Mainnet’s launch month, 5.15% of SUI tokens were in circulation.
Non-circulating tokens are reserved for staking and released according to a preset schedule. Early contributors received tokens subject to a lockup period.
Sui network made a significant milestone with the introduction of DeepBook, its pioneering native decentralized central limit order book (CLOB). DeepBook, a product of the collective efforts of the Sui community, offers a robust liquidity layer that paves the way for the next wave of DeFi applications.
DeepBook provides a ready-to-use liquidity layer for DeFi developers and others, harnessing the power of Sui’s consensus mechanism for optimal performance. Its open API allows developers to seamlessly integrate their applications and facilitate asset trading.
Upon its launch, DeepBook was adopted by several exchanges to enhance their trading functionality and contribute to its liquidity. Notable entities such as KriyaDEX, Turbos.Finance, Aftermath Finance, Cetus, Kairon Labs, and MovEX were instrumental in testing and are currently utilizing DeepBook to bolster their services. However, following recent events, MovEX will no longer be contributing to the DeepBook project.
