DoubleZero (2Z) recently received a non-action letter from the SEC and made a headline after marking a key regulatory milestone for its blockchain infrastructure project.
But instead of strengthening market trust, the controversial token allocation mechanism has sparked skepticism within the community. I also sent the token price to the ground right after the list.
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In late September 2025, major development of DoubleZero (2Z) took place. The SEC issued an actionless letter regarding the 2Z token distribution mechanism. This rare move was seen by many in the industry as a encouragement for infrastructure projects and collaboration with regulators.
“Today’s non-action letters exemplify how performing that role helps infrastructure providers spend deeper time building infrastructure rather than knee depth when analyzing the nuances of securities law,” the statement said.
On the product side, DoubleZero is also highly regarded by industry experts. It aims to tackle the issues of bandwidth and latency in distributed systems by providing dedicated fiber optic connections, representing the rewards of bandwidth providers, and acting as a foundational layer for “accelerating” high-performance blockchains.
If successful, the project could translate the way data is transmitted into nodes and validators, potentially “larger than just a blockchain.”
“DoubleZero is one of the most ambitious projects we have ever invested in. Its technology makes all high-performance blockchains faster and more performant. This is the innovation needed when on-chain price discovery is required for every asset in the world.”
However, despite these positive signals, DoubleZero’s 2Z tokens fell sharply after the initial surge after listing. At the time of compensation, 2Z was trading at $0.53501, a 40% decrease from the recent ATH.
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Many issues with toconemics
The main issue is not about technology, but about unlocking talknomics and mechanisms. The sudden influx of supply into the market and the massive token transfers by key stakeholders put downward pressure on prices.
Toconomy reveals the total initial supply of 10 billion tokens distributed across the group (including Foundation & Ecosystem ~29%, Jump Crypto ~28%, Malbec Labs ~14%, Team ~10%, etc.). Many critics argue that the project allocated only to VCs the tokens without meaningful distribution to the community.
“Many suspicious things about DoubleZero Tokenomics… Only insiders were assigned to the token!” highlighted one X user.
Arkham’s data also shows that Jump Crypto received $42.8 million worth of 2Z tokens, of which $20 million was deposited for Binance and Bibit. This suggests potential sale by market manufacturers, which contributes to lower prices.
Not only is there a suspicion of dumping from the MM, but another thing worth noting is that some parts were in “unlocked” status at startup. Data recorded the total circular supply of 2Z tokens at the time of launch was approximately 3.47 billion.
This number is much larger than the announcement of 7% or 700 million 2Z Mica whitepapers of the project. The origin of these tokens is still unknown, creating information gaps and increasing negative emotions online.
While the No-action Letter represents a regulatory victory in DoubleZero’s infrastructure model, the risks caused by concentrated supply and unclear vesting schedules remain important factors behind token price volatility and the trust of the shaking community.
