Space Protocol, a nascent decentralized finance (DeFi) project targeting interplanetary data solutions, has issued a vigorous defense of its recent private token sale, which successfully secured $20 million but immediately ignited significant community pushback regarding token distribution and valuation.
The capital raise, led by several prominent Web3 venture capital firms, closed last week and placed the protocol’s implied Fully Diluted Valuation (FDV) at an estimated $200 million pre-product launch. Critics primarily focused on this high valuation and the perceived centralization risk stemming from the large allocation dedicated to institutional investors—a decision many community members deemed antithetical to the project’s stated goal of decentralization.
In a detailed statement released late Tuesday, Space Protocol CEO Elias Thorne addressed the controversy head-on. Thorne emphasized that the $20 million was crucial for ensuring a multi-year runway, attracting world-class engineering talent, and covering necessary auditing and regulatory compliance costs associated with scaling a global utility.
“We understand the community’s apprehension regarding early allocations,” Thorne wrote. “However, this strategic funding ensures resilience against volatile market conditions and accelerates our roadmap. We are committed to transparency regarding vesting schedules, which are designed to prevent large token dumps upon launch.”
Thorne clarified that institutional investors are subject to a strict 12-month lock-up period, followed by a 24-month linear vesting schedule. Furthermore, he announced plans for a significant public token distribution via a community airdrop targeting early testers and small retail participants ahead of the official Mainnet launch, slated for Q3 of this year. While the defense aims to quell the uproar, analysts suggest that Space Protocol must quickly deliver tangible product milestones to justify its high valuation and fully rebuild community trust.
Source: Space Protocol defends token sale amid backlash over $20 million raise
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