Author and Columbia Business School professor Omid Malekan has voiced concerns that newly launched layer-1 blockchains such as Aptos & Celestia that engage in tokenomics practices could eventually attract regulatory attention and result in crackdowns.
Crypto Projects Like Aptos And Celestia’s “Insider” Approach Is Injustice
Malekan observed on January 7 that some projects allow insiders with locked tokens to stake and receive rewards. The professor agrees that increased staking can improve network security. Still, he believes it is “unfair” to let “insiders” stake and profit from their locked tokens since retail token holders must pay the total price for the assets.
Insiders gain access to token prices at significantly reduced prices, often as early adopters taking part in seed sales or other funding rounds. This gives them a significant advantage, sometimes even granting them the chance to become whales or hold substantial quantities of the asset. This is particularly true if the project takes the lead in the market and commands high valuations.
Concerns regarding insiders being able to sell their staking rewards right away—sometimes years before their tokens vest—were also voiced by Malekan. The professor objected to the practice on X, saying that it is “just wrong” and that it opens a “backdoor that allows privileged insiders to dump on ordinary users for a quick profit.”
The professor suggests that upcoming and established platforms modify their tokenomics strategy, given the tendencies of new projects such as Celestia and Aptos. They should aim to benefit early adopters and insiders more than long-term sustainability and a route to neutrality, primarily for all token holders.
The author claims there are “many red flags” and the current setup is “chronologically disappointing.”
SEC And Other Authorities Could Intervene Soon
The professor cautions that regulators, such as the stringent US Securities and Exchange Commission (SEC) and others, will probably step in if these projects fail to address this issue. This is significant because most authorities—particularly the SEC—have been circumspect in their assessments of cryptocurrencies other than Bitcoin (BTC).
SEC officials have clarified that the only commodity that qualifies is Bitcoin. However, based on their preview, their assessment might categorize the remaining ones as securities.
Gary Gensler refrained from responding to inquiries about whether Ethereum, the most valuable altcoin in the world, is a security or a commodity similar to Bitcoin to highlight the significance of this classification, which could have a significant impact on staking and, by extension, network security.
