Omid Malekan, a renowned author and professor at Columbia Business School, has raised concerns about a tokenomics practice prevalent among newly launched layer-1 blockchains such as Aptos and Celestia. He fears that this practice may soon attract regulatory scrutiny and potential crackdowns.
Malekan criticized the practice of allowing insiders with locked tokens to stake and earn rewards. While he acknowledges that increased staking can boost network security, he deems it “unfair” that retail token holders have to pay full price for the assets. Insiders, who are often early adopters involved in seed sales or other funding rounds, receive tokens at significantly discounted prices. This gives them an “advantage” and even the potential to become whales or hold large quantities of the asset, especially if the project becomes a market leader with high valuations.
The professor also expressed concerns about insiders being allowed to sell their staking rewards immediately, sometimes years before their tokens vest. He described this as a “backdoor unlock” that enables privileged insiders to make a quick profit at the expense of ordinary users. In response to these practices, Malekan advises both upcoming and existing platforms to revise their tokenomics strategy. He suggests that their focus should be on long-term sustainability and neutrality for all token holders, rather than rewarding insiders and early investors.
Malekan has identified “many red flags” and expressed his chronological disappointment with the current setup. He warns that if these projects do not address these issues, regulators such as the US Securities and Exchange Commission (SEC) and others are likely to intervene. This is particularly significant given that most agencies, especially the SEC, have been cautious in their commentary on altcoins other than Bitcoin (BTC).
Some SEC officials have stated that only Bitcoin is a commodity, while the rest may be classified as securities under their purview. The classification could have serious implications for staking and, consequently, network security. Gary Gensler, for instance, has avoided answering questions about whether Ethereum, the world’s most capitalized altcoin, is a security or a commodity like Bitcoin.
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| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Gary Gensler, Omid Malekan |
| Companies | Aptos, TradingView, US Securities and Exchange Commission (SEC), Celestia, Columbia Business School, Canva |
| Currencies | Ethereum, Bitcoin |
| Securities | None |
