DoubleZero (2Z) just lately made headlines after receiving a No-Motion Letter from the SEC, marking a big regulatory milestone for the blockchain infrastructure undertaking.
Nonetheless, as an alternative of strengthening market confidence, the controversial token allocation mechanism sparked skepticism inside the neighborhood. It additionally despatched the token’s value to the bottom proper after itemizing.
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In late September 2025, a serious improvement occurred for DoubleZero (2Z). The SEC issued a No-Motion Letter regarding 2Z’s token distribution mechanism. This uncommon transfer was seen by many within the trade as an encouraging signal of collaboration between infrastructure initiatives and regulators.
“Right now’s no-action letter exemplifies how performing that position might help 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 aspect, DoubleZero has additionally been extremely regarded by trade specialists. It goals to deal with bandwidth and latency points in distributed methods by offering devoted fiber-optic connections, tokenizing rewards for bandwidth suppliers, and performing as a foundational layer to “speed up” high-performance blockchains.
If profitable, the undertaking might rework how information is transmitted throughout nodes and validators, probably becoming “larger than simply blockchains.”
“DoubleZero is without doubt one of the most bold initiatives we’ve ever invested in. Their expertise will make all excessive efficiency blockchains quicker and extra performant. That is the innovation we want if we would like on-chain value discovery for all the world’s property,” shared the Co-founder of Multicoin Capital.
But, regardless of these constructive indicators, DoubleZero’s 2Z token noticed a pointy decline after an preliminary surge post-listing. On the time of protection, 2Z was buying and selling at $0.53501, down 40% from its current ATH.
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Many Issues with Tokenomics
The principle situation lies not within the expertise but in tokenomics and unlock mechanisms. A sudden inflow of provide into the market and enormous token transfers by main stakeholders exerted downward stress on the value.
Tokenomics reveals a complete preliminary provide of 10 billion tokens distributed throughout teams (Basis & Ecosystem ~29%, Leap Crypto ~28%, Malbec Labs ~14%, Workforce ~10%, and others), with various vesting schedules. Many critics argue that the undertaking solely allotted tokens to VCs with none significant distribution to the neighborhood.
“Plenty of questionable issues within the DoubleZero tokenomics… Solely the insiders had been allotted tokens!” emphasized one X consumer.
Arkham data additionally confirmed that Leap Crypto obtained $42.8 million value of 2Z tokens, of which $20.9 million had been deposited to Binance and Bybit. This means potential sell-offs by market makers, contributing to the decline in value.
Not solely is there a suspicion of dumping from MM, however one other factor value noting is that some elements had been in “unlocked” standing at launch. Knowledge recorded that the entire circulating provide of 2Z tokens at launch was about 3.47 billion.
This quantity is way bigger than the announcement within the undertaking’s MiCA whitepaper of seven% or 700 million 2Z. The origin of those tokens remains to be unclear, creating an data hole and growing unfavorable sentiment on-line.
Whereas the No-Motion 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 value volatility and shaken neighborhood belief.