Over the weekend, the IOTA Foundation’s plans to artificially increase token holdings by 65 percent sparked much discussion. IOTA co-founder David Sønstebø speaks out critically and has concrete demands.
The “inflation hammer” announced by the IOTA Foundation at the weekend is reverberating. In a coup de grâce, the foundation, under head Domink Schiener, decided to “reprint” 65 percent more IOTA as of September 29 in order to finance its work and expansion. The resulting price pressure on IOTA comes as a complete surprise to investors, and the community feels blindsided. In the situation, the word of David Sønstebø, who led the foundation until he was kicked out as IOTA co-founder in December 2020, should carry weight.
With a blog post, Sønstebø makes it clear that he, too, was caught cold by the foundation’s far-reaching decisions. “Never before has the IOTA community been asked to accept something so radical and significant – while at the same time having less information than ever before,” Sønstebø writes. He continues to be the individual with the largest IOTA holdings, by the way. What exactly does the UAE’s entry into IOTA mean, Sønstebø asks. And anyway: How could one come up with the idea to distribute 5 percent of the future IOTA stock worth tens of millions of US dollars to so-called “contributors” and who should profit from this?
Sønstebø assumes that the Berlin-based non-profit IOTA Foundation will face considerable legal problems if it does not coordinate its inflation and restructuring plans with the community. But Sønstebø also builds a bridge: “With transparency and inclusion, the whole debacle could turn into something where the community is behind it.” To that end, IOTA legend David Sønstebø makes five specific demands:
1. a transparency report is needed in which the IOTA Foundation discloses who exactly the new shareholders will be, what legal guarantees will be given, and how much money will change hands.
2. the community must be allowed to vote on the percentage by which the total IOTA holdings will be increased and the time periods over which partial sales bans will apply to the new IOTAs.
3. The community should also be allowed to decide which well-known IOTA representatives should be issued new tokens.
4. the IOTA board should be expanded by at least two new members from the community.
5. the foundation should organize a public Q&A session with the board of directors, so that the community is sufficiently informed, can show its own perspective and ultimately the question of legal responsibility is clarified.
On X (formerly Twitter), Sønstebø receives almost 100 percent approval for his critical thoughts and suggestions on what a compromise between the IOTA Foundation and the community should look like. Dominik Schiener, the head of the foundation, who was directly addressed, has – as far as we know – not yet taken a stand. It was he who pushed Sønstebø out of the foundation and since then, according to the statutes, has basically been the sole ruler of IOTA.
Conclusion: Opposition to IOTA inflation is forming
Whether the constructive criticism of Sønstebø for IOTA bears fruit? Anyone familiar with Schiener’s recurring solo efforts will doubt that the IOTA boss will adjust his plans once again. Whether Sønstebø will go to court himself if necessary? He had hinted at this once or twice after his falling out with Schiener, but never acted on it. In any case, Schiener is getting very lonely right now, because the hard fork with massive new IOTA tokens scheduled for September 29 has met with zero applause among critical investors.
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