
In 2021, many FTX employees were set to become fabulously rich because their holdings of Serum's SRM had shot up in value.
But that annoyed Sam Bankman-Fried, who had backed Serum, because that meant that his employees might not be so willing to put in 14-hour days at his crypto exchange, since they were now paper multi-millionaires.
In his new book, Michael Lewis says, With highly liquid cryptocurrencies, it's viewed as crucial that insiders not be able to dump them on retail investors as soon as the tokens start getting some traction.
Locked-up tokens have heightened the perception that the team is in for the long-haul. The exact schedule of these token unlocks is published as part of a project's tokenomics.
SRM was a rising star during the bull market of 2020-2021. At the time, CoinDesk reported that it experienced significant price hikes after being listed on Binance, thanks to its association with the decentralized exchange Serum on the Solana blockchain, and its collaboration with Sam Bankman-Fried of FTX and Alameda Research.
In September 2021, SRM hit an all-time record high of $13.72 in September, according to CoinDesk Indicies data, making anyone on the team that was allocated tokens at the launch price of $1.70 in August 2020 'ridiculously rich', Lewis said.
Serum's SRM tokens surged in value in the weeks following FTX's bankruptcy in November, and its subsequent hack, given the decentralized exchange community's uncertain future given its links to the compromised FTX.