How Does Movement Work?
Movement is a Move language-based Ethereum Layer 2 (now pivoting toward L1) that launched its mainnet in December 2024 with the MEVM hybrid execution environment. The project has approximately $50M in TVL and raised $141M in funding. Its C- grade is driven primarily by a serious governance crisis: a market maker scandal in 2025 resulted in co-founder Rushi Manche's suspension, Coinbase delisting the MOVE token, a company rebrand to Move Industries, and an 80%+ token price decline from all-time highs. The centralized sequencer with no forced-inclusion mechanism, novel MEVM execution layer with limited production history, and ongoing organizational instability compound the risk profile.
TVL
$50M
Sector
L2
Risk Grade
C
Value Grade
D-
Core Mechanisms
7.1 Optimistic Rollup / L2
NovelMoveVM-based Ethereum L2 using Move language for smart contract execution (MEVM — Move + EVM hybrid)
The MEVM (Move + EVM) execution layer is a novel approach — bringing Move language safety guarantees to an Ethereum rollup context. Limited production history since December 2024 mainnet.
7.2 Sequencer
Centralized sequencer operated by Movement team with no permissionless validation or forced inclusion
Standard centralized sequencer pattern common to early-stage L2s. No forced-inclusion fallback documented.
6.1 Bridge / Lock-and-Mint
Canonical bridge between Ethereum and Movement mainnet
Standard bridge pattern. Upgrade mechanism and admin controls not well-documented publicly.
5.1 Governance Token
MOVE token for fees, staked settlement, and governance voting. 10B total supply with monthly 170M token unlocks.
Standard governance/utility token. Heavy monthly unlocks (~5-6% of circulating supply) create persistent sell pressure.
2.1 Staking / Settlement
MOVE staking for settlement module participation
Staked settlement mechanism for network participation. Details on slashing and reward mechanics are limited.
4.1 Airdrop / Token Distribution
MoveDrop airdrop of 10% of total supply (1B tokens) to early users and contributors
Standard airdrop distribution. Executed in December 2024 alongside TGE.
How the Pieces Interact
If the centralized sequencer goes offline, users cannot exit through the bridge. No forced-inclusion mechanism exists, meaning funds are frozen during any sequencer downtime with no user-accessible fallback.
Monthly unlocks of approximately 170M tokens (5-6% of circulating supply) create persistent sell pressure. Combined with the market maker scandal's reputational damage, this could suppress token price and governance participation long-term.
The MEVM hybrid execution environment (Move + EVM) is a novel approach with limited production history. Edge cases in the Move-to-EVM translation layer could create unexpected vulnerabilities in how bridged assets are handled.
The staked settlement module depends on the centralized sequencer to propose and finalize state. If the sequencer submits invalid state, the settlement mechanism's ability to reject it depends on implementation details that are not well-documented.
40% of tokens allocated to early contributors (17.5%) and early backers (22.5%) with monthly vesting creates a governance structure where insiders maintain significant influence during the critical early period of decentralization.
What Could Go Wrong
- Movement Labs experienced a major market maker scandal in 2025: an obscure middleman (Rentech) was granted control of 66 million MOVE tokens through a deal that experts said incentivized pump-and-dump behavior, resulting in a $38M token dump shortly after launch. Co-founder Rushi Manche was suspended, and the company rebranded as Move Industries.
- Coinbase delisted MOVE in May 2025 due to failure to meet listing standards, sending the token to all-time lows and signaling severe concerns about the project's governance and tokenomics from a major exchange.
- Movement operates with a centralized sequencer and proposer with no permissionless fraud proofs or forced-inclusion mechanism. Users must trust the operator to process transactions honestly and maintain liveness, with no independent exit mechanism.
- The project has pivoted from an Ethereum L2 to a standalone L1 strategy, creating uncertainty about the long-term architecture. Multiple rebrands (Movement Labs to Move Industries) and leadership changes signal organizational instability.
Organizational Collapse and Network Abandonment
ModerateTrigger: Continued leadership instability following Rushi Manche's suspension, combined with ongoing regulatory scrutiny from the market maker scandal, causes key engineering talent to leave and funding to dry up
- 1.Regulatory investigation into the Rentech/market maker deal expands, potentially triggering SEC enforcement action against Movement/Move Industries — Legal costs mount; remaining leadership diverts attention from development to legal defense; additional team departures
- 2.Monthly MOVE token unlocks (170M/month) continue while ecosystem activity declines and buy-side demand evaporates — MOVE price enters sustained decline below $0.02; staking rewards become negligible; governance participation drops
- 3.DeFi protocols on Movement (TVL ~$50M) migrate to competing Move-based chains (Aptos, Sui) or back to Ethereum L2s — TVL declines below $10M; the MEVM differentiator loses value as developers choose more stable platforms
- 4.Centralized sequencer maintenance becomes unsustainable as team shrinks; block production becomes intermittent — Users who remain face frozen funds with no forced-inclusion exit; network effectively abandoned
Risk Profile at a Glance
Overall: C (44/100)
Lower score = safer