Finance expert explains why Binance's Serum tokens are a huge hit

Finance expert explains why Binance's Serum tokens are a huge hit

They were set to become extremely rich because their holdings of Serum's SRM had shot up in value in 2021.

But that annoyed Sam Bankman-Fried, who had backed Serum, since that meant that those employees might not be so willing to put in 14-hour days at his crypto exchange, since they were now paper multi-millionaires.

It's viewed as crucial that insiders not be able to dump them on retail investors as soon as the tokens get some traction, Lewis says in his new book.

Locked-up tokens give off the impression 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 in the bull market of 2020-2021. After being listed on Binance, it experienced substantial price surges after being listed on the site, owing to its association with the decentralized exchange Serum on the Solana blockchain and its link with Sam Bankman-Fried of FTX and Alameda Research.

SRM hit an all-time high of $13.72 in September 2021, according to CoinDesk Indicies data, making anyone on the team that was allocated tokens at its launch price of $1.70 in August 2020 'ridiculously rich', Lewis said.

In the weeks after FTX's bankruptcy last November, and its subsequent hack, Serum's SRM tokens rose in value as the decentralized exchange community instituted an emergency fork to address security concerns, given that the token's uncertain future given its ties to the compromised FTX.