2Z Token Tanks Despite SEC Green Light, Sparking Backlash Over Tokenomics
DoubleZero (2Z) just lately made headlines after receiving a No-Action Letter from the SEC, marking a major regulatory milestone for the blockchain infrastructure challenge.
However, as a substitute of strengthening market confidence, the controversial token allocation mechanism sparked skepticism throughout the group. It additionally despatched the token’s worth to the bottom proper after itemizing.
SEC’s “No-Action Letter” Fails to Calm Community Outrage
In late September 2025, a significant improvement occurred for DoubleZero (2Z). The SEC issued a No-Action Letter regarding 2Z’s token distribution mechanism. This uncommon transfer was seen by many within the business as an encouraging signal of collaboration between infrastructure tasks and regulators.
“Today’s no-action letter exemplifies how performing that function can assist infrastructure suppliers spend their time deep within the weeds of constructing out infrastructure, not knee-deep in parsing the nuances of securities legal guidelines,” the assertion noted.
On the product facet, DoubleZero has additionally been extremely regarded by business consultants. It goals to sort out bandwidth and latency points in distributed methods by offering devoted fiber-optic connections, tokenizing rewards for bandwidth suppliers, and appearing as a foundational layer to “speed up” high-performance blockchains.
If profitable, the challenge may rework how information is transmitted throughout nodes and validators, probably becoming “greater than simply blockchains.”
“DoubleZero is among the most bold tasks we’ve ever invested in. Their know-how will make all high efficiency blockchains quicker and extra performant. This is the innovation we’d like if we wish on-chain worth discovery for the entire world’s belongings,” shared the Co-founder of Multicoin Capital.
Yet, regardless of these constructive alerts, DoubleZero’s 2Z token noticed a pointy decline after an preliminary surge post-listing. At the time of protection, 2Z was buying and selling at $0.53501, down 40% from its latest ATH.
Many Problems with Tokenomics
The predominant concern lies not within the know-how but in tokenomics and unlock mechanisms. A sudden inflow of provide into the market and enormous token transfers by main stakeholders exerted downward strain on the worth.
Tokenomics reveals a complete preliminary provide of 10 billion tokens distributed throughout teams (Foundation & Ecosystem ~29%, Jump Crypto ~28%, Malbec Labs ~14%, Team ~10%, and others), with various vesting schedules. Many critics argue that the challenge solely allotted tokens to VCs with none significant distribution to the group.
“A number of questionable issues within the DoubleZero tokenomics… Only the insiders have been allotted tokens!” emphasized one X consumer.
Arkham data additionally confirmed that Jump Crypto acquired $42.8 million price of 2Z tokens, of which $20.9 million had been deposited to Binance and Bybit. This suggests potential sell-offs by market makers, contributing to the decline in worth.
Not solely is there a suspicion of dumping from MM, however one other factor price noting is that some elements have been in “unlocked” standing at launch. Data recorded that the overall circulating provide of 2Z tokens at launch was about 3.47 billion.
This quantity is way bigger than the announcement within the challenge’s MiCA whitepaper of seven% or 700 million 2Z. The origin of those tokens remains to be unclear, creating an info hole and rising detrimental sentiment on-line.
While the No-Action Letter represents a regulatory win for DoubleZero’s infrastructure mannequin, dangers stemming from concentrated provide and unclear vesting schedules stay the important thing components behind the token’s worth volatility and shaken group belief.
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