Introduction

As Web3 and blockchain technology continue to evolve, interest in this field has grown substantially, particularly over the past year. This interest shows no signs of fading, with projections indicating that the total market value of the blockchain industry could reach 67 billion USD by 2026.

The global expansion of blockchain and Web3, along with a growing curiosity to explore this domain, has led to the emergence of numerous new blockchain projects. Sui Blockchain is a Layer 1 project dedicated to providing highly scalable and low-latency services.

What is Sui Blockchain?

Sui is a decentralized Layer 1 blockchain designed to streamline the Web3 development process.

The developers at Mysten Labs created Sui using the MOVE programming language, originally developed for Meta’s discontinued Diem crypto network. Drawing on their experience with Diem, the co-founders created Sui—a highly scalable network built on a proof-of-stake consensus mechanism.

Sui is a smart contract platform that integrates new blockchain technology, ensuring horizontal scalability and low latency across the network. It was developed to support Web3 projects while offering a user-friendly experience.

The Development of Sui

Mysten Labs, a Web3 infrastructure company, developed Sui Blockchain. The founding team includes Adeyemi Abiodun, a developer with extensive experience in blockchain, who previously worked on Facebook’s discontinued Diem Network. Evan Cheng, another co-founder and the current CEO, brings over 15 years of experience from tech giants like Apple and Meta. Cheng, Abiodun, and two other former Facebook employees played pivotal roles in developing the Move programming language initially used in the Diem project.

The founders leveraged the Move programming language to build the Sui Blockchain, positioning it to rival Ethereum and other leading blockchains regarding scalability and use cases. Traditional blockchains often demand high transaction fees as the user base expands. Sui Blockchain incorporates technology capable of supporting millions or even billions of users in addressing this.

The Sui Blockchain project has garnered significant support from investors. Mysten Labs raised $36 million in its Series A funding round, with backing from Coinbase Ventures, Standard Crypto, Redpoint, and Lightspeed. The second round of financing, led by FTX Ventures, is expected to raise even more, potentially valuing the company at over $2 billion.

How Does Sui Blockchain Work?

Sui operates as a distributed ledger with a unique approach to storing events on the blockchain. It tracks every programmable object (which acts as storage units pointing to smart contracts on the platform) and assigns each a globally unique ID. All objects can be traced to a specific address, each holding multiple objects.

When a transaction is processed, its records are added to the Sui ledger via the wallet address. These transactions might involve creating smart contracts, destroying assets, or transferring ownership to different addresses. On the Sui Blockchain, validators validate and execute transactions in parallel using Byzantine broadcast protocols.

In the Sui ecosystem, transactions are classified into two types: owned objects and shared objects. The former is accessible to a specific owner, while multiple users can modify the latter.

In traditional blockchains, each transaction requires processing and consensus from all validators. However, on Sui, the consensus mechanism applies only to shared objects. By removing the consensus requirement for owned objects, Sui achieves low latency. Sui employs the Narwhal & Bullshark DAG-based (Directed Acyclic Graph) mempool and an efficient Byzantine Fault Tolerant (BFT) consensus mechanism during transactions.

Sui Blockchain Architecture

According to the Sui Blockchain white paper, Sui consists primarily of three components: objects, transactions, and validators, which form the core of its ecosystem. But what exactly are these components?

Transactions: These are the changes and updates recorded in the Sui ledger. Each transaction on the Sui network includes common metadata such as gas prices, timestamps, and sender addresses.

Objects: On Sui, objects are the fundamental storage units within the ecosystem. These programmable objects are managed by Move Packages in smart contracts. All objects in Sui are categorized into mutable data values and immutable sets.

Validators: Similar to other PoS networks, Sui operates through independent validators, each running an instance of the Sui software on separate machines. Validators handle “read/write” requests sent by clients.

Distinct Advantages of the Sui Blockchain

The Mysten Labs team has highlighted several technologies that give the Sui Blockchain a competitive edge. These include:

Move Programming Language

The Diem Network developers have a deep understanding of this bytecode language. On Sui, MOVE helps prevent malicious tokens and security vulnerabilities. MOVE enables the creation of customizable transaction logic and smart contracts. It also supports cross-platform usage, allowing for the sharing of libraries and tools, which fosters the growth of the blockchain developer community within the crypto space. With MOVE, developers can transition seamlessly from Web2 to Web3.

Parallel Transaction Execution

The Sui Blockchain processes transactions using Byzantine broadcast protocols, bypassing global consensus while maintaining sufficient security. Unlike traditional blockchains, Sui validates each transaction individually, enabling it to achieve high scalability while keeping transaction fees reasonable.

Streamlined Developer Experience

Sui’s base programming language simplifies the process for developers when writing code for projects. The Move programming language reduces the need for boilerplate code, allowing developers to build without worrying about errors.

Additionally, Sui offers a Sui Development Kit (SDK) that includes various tools, enabling developers to maximize the blockchain’s potential for their projects.

SUI Explorer

The Sui Explorer was launched in August as a transparent tool created by the Sui development team to enhance transparency and decentralization. The Sui Explorer allows users and developers to view and analyze on-chain data, confirm activities, and verify transactions.

The Sui Explorer is committed to providing timely, accurate data on on-chain activities and metrics. Users can verify and track their assets and smart contracts using the Sui Explorer, which was designed with debugging and auditing in mind. Developers can access the tool and improve their smart contracts using the Move programming language.

SUI Tokenomics

SUI is the native token of the Sui project, with a total supply capped at 10 billion. Part of this supply will be distributed when the mainnet launches, with other portions allocated over time as staking rewards and subsidies. Approximately 50% of the tokens will be reserved for community initiatives, 20% will go to early contributors, 14% will be allocated to investors, 10% will be placed in the Mysten Labs treasury, and 6% will be used for community access programs like initial exchange offerings (IEOs) and application testers.

Use Cases for SUI

The SUI token was designed with multiple functions in mind, including:

1. Gas Fees: SUI tokens are used to pay gas fees for transactions and interactions with complex applications on the platform.
2. Staking: The platform’s consensus mechanism requires validators to stake a certain amount of SUI to validate transactions on the network. SUI holders can also choose to delegate their tokens to validators on the network.
3. Governance: SUI token holders can participate in the platform’s governance like most decentralized finance projects.
4. Rewards: Staking rewards and compensation for validators are paid out in SUI tokens.
5. Medium of Exchange: SUI also serves as a digital currency, a medium of exchange and a store of value.

Participants in the Sui Economy

The Sui economic system includes three main participant roles:

1. Users: They submit transactions to create, modify, transfer digital assets, and interact with smart contracts.
2. SUI Holders: They can stake their tokens and participate in governance.
3. Validators: They are responsible for processing and executing transactions on the Sui platform.

Core Components of Sui’s Economy

The economic structure of Sui is built around the following core components:

1. SUI Tokens: SUI is the native asset of the platform.
2. Gas Fees: These reward participants in the proof-of-stake system and prevent spam and denial-of-service attacks.
3. Storage Fund: This is used to compensate future validators for storage costs.
4. Proof of Stake: This mechanism selects and incentivizes Sui validators.
5. Voting System: On-chain voting is used for governance and protocol upgrades.

In summary, SUI tokenomics combines staking, transaction fees, and governance features to support the sustainable development of the Sui platform and promote positive interactions between users and validators.

Projects on the Sui Blockchain

Sui is a relatively new blockchain whose ecosystem has not yet deployed any DeFi projects. However, even before the mainnet launch, Sui has formed close collaborations with SoWork and Panzerdogs.

SoWork

SoWork is a metaverse project focused on creating a blockchain-based office environment. SoWork chose Sui as its underlying blockchain and uses dynamic NFTs to enhance its assets, such as land, items, and achievements.

On the Sui blockchain, SoWork plans to implement two main features:

Employee Achievement NFTs

Companies can reward outstanding employees with non-fungible tokens (NFTs). The criteria for issuing these NFTs are customizable, and companies can attach unlockable perks to the rewards. They can also issue achievement NFTs based on quality, value, and specific events.

Minting NFTs with MapMaker

SoWork’s MapMaker feature will allow users to mint unique NFTs, which can be integrated into the metaverse. These NFTs can include elements like furniture, clothing, and more. This feature enables seamless minting and importing of NFTs.

Panzerdogs

Panzerdogs, developed by Lucky Kat Studios, is an NFT game project demonstrating Sui’s capabilities in hosting gaming and blockchain applications.

Through Panzerdogs, users can engage in battles using their in-game assets. Sui’s consensus model and high transaction speed make it an ideal platform for this project. Panzerdogs also allows users to import and upgrade their personal NFTs to enhance the gaming experience.

Sui & Aptos

In the crypto world, Aptos and Sui are often mistaken for each other. While these two blockchains share a similar origin, they are distinct projects.

However, they do share some commonalities. Like its predecessor, Sui was created as an alternative and upgrade to mainstream blockchains. Both Sui and Aptos are built using the bytecode programming language MOVE.

Thanks to their parallel transaction execution capabilities and consensus technologies, both Aptos and Sui achieve horizontal scalability. Both projects have secured significant funding and have similar valuations.

The main differences between the two lie in their launch timelines and the number of projects built on each. Although Aptos’s mainnet has not yet launched, many blockchain projects have already been deployed within its ecosystem. In contrast, Sui currently has only two collaborative projects. Additionally, Sui Blockchain focuses on gaming and NFTs, while Aptos is designed with users and developers in mind.

Total Value Locked (TVL) on Sui

Currently, the total value locked (TVL) within the Sui ecosystem is around $597 million, highlighting Sui’s growth potential as a new public blockchain in the DeFi space. The consistent rise in Sui’s TVL over recent months reflects the ecosystem’s vibrancy and growing user engagement. As more DeFi projects launch on Sui, the platform attracts increasing capital inflows.

Sui DeFi

Sui is a promising Layer 1 blockchain with rapid development in its DeFi ecosystem since its mainnet launch in May 2023. DeFi projects on Sui benefit from the network’s unique transaction processing model, which offers higher transaction throughput than other blockchains. This results in more DeFi activity per second, faster transaction confirmations, and reduced risk for volatile market users.

Cetus

Type: Decentralized Exchange (DEX)

Features: Cetus is one of the largest DEXs on Sui, designed to offer DeFi users an optimal trading experience and exceptional liquidity efficiency. It achieves this by building a concentrated liquidity protocol alongside various interoperable modules. Cetus operates on a CLMM (Concentrated Liquidity Market Maker) model, providing users with a customizable liquidity protocol. This allows users to execute nearly all complex trading strategies typically available on centralized exchanges (CEXs), such as swaps, range orders, and limit orders. Although recently surpassed by NAVI Protocol in TVL, Cetus remains a key player in the Sui ecosystem. Cetus supports liquidity mining and offers a variety of trading pairs, attracting a significant user base.

NAVI Protocol

Type: Lending Protocol

TVL: NAVI’s TVL currently stands at approximately $229 million, having grown by about 208% over the past month.

Features: NAVI offers deposit and lending services, supporting deposits of SUI, USDC, and USDT, and provides incentives to attract users. NAVI has also collaborated with OKX DeFi to launch interest-boosting campaigns, further accelerating user growth.

Overview: NAVI Protocol is one of the largest DeFi protocols within the Sui ecosystem, offering lending and liquidity staking services. Since Sui’s mainnet launch, NAVI Protocol has experienced significant growth, now boasting over 800,000 users and a TVL exceeding $200 million. Prominent investors, including OKX Ventures, Hashed, and Dao5 back the protocol. NAVI’s native token, NAVX, has been listed on multiple trading platforms, giving users broad access to the market.

Sui Applications

Sui Wallet

A Sui wallet is necessary to interact with most Sui applications. This wallet functions as your online account, allowing you to connect to various applications and manage your digital assets, including SUI tokens, NFTs, stablecoins, and other fungible tokens. Sui wallets are typically available as browser extensions or mobile apps, tailored to meet different user needs and ensure a smooth experience.

Setting Up a Wallet:

Creating a Sui wallet involves setting up a new Sui account, which can be done in one of two ways:

1. Create a new password account or use Web2 login (e.g., via zkLogin with a Gmail account): If you use a password phrase, securely store the recovery phrase provided during setup offline. You won’t be able to recover your wallet without access to the recovery phrase.
2. Create an account using Web2 login: Follow the instructions to log in, ensuring only you can access the account.

Key Features of Sui Wallet:

1. Asset Management: Easily receive, send, and trade SUI tokens and other digital assets, and track your transaction history.
2. DApp Interaction: Seamlessly connects to various decentralized applications, enhancing the user experience.
3. Security: Multiple layers of security are provided to ensure the safety of your assets.
4. Liquidity Mining and Staking: Users can participate in liquidity mining and staking to earn additional rewards.

Sui Bridge

For Web3 users with assets on other blockchains, the SUI cross-chain bridge offers a convenient way to integrate into the Sui ecosystem. These bridges enable users to transfer digital assets between blockchains, making bringing existing tokens into Sui easy. When using the bridge, users must connect their source and destination wallets to the same application and then submit a transaction from the source wallet. Depending on the networks involved, the processing time for a bridge transaction may take up to 15 minutes.

The Wormhole Portal Bridge is the primary option for transferring assets to Sui. Many DeFi applications within the Sui ecosystem have also integrated Wormhole bridges, offering users convenient asset bridging, especially when engaging with DeFi. The Sui Bridge consists of four key components: the Sui Bridge Committee or node network, Sui Bridge smart contracts, full nodes running on Ethereum and Sui, and Bridge Client.

The Client acts as the interface between users and the Sui Bridge infrastructure, coordinating bridging operations by submitting correctly formatted transactions and collecting Sui Bridge node signatures. The Client uses full nodes on both bridge sides to process transactions. Sui Bridge nodes also run full nodes on Ethereum and Sui to monitor bridge operations and respond to them via transactions. Although Bridge Client is permissionless and open to anyone, many bridging nodes operate the Client to ensure network activity.

The native Sui Bridge is currently operating on the testnet and is expected to launch on the mainnet in September. This will provide an additional bridging option for the Sui ecosystem, enhancing interoperability between Sui and other blockchains and enabling users to securely and efficiently transfer assets like ETH, wBTC, USDC, and USDT across chains, taking full advantage of Sui’s fast transaction speeds and low transaction costs.

Sui Compared to Other Major Public Blockchains

The table clearly shows that Sui outperforms Ethereum in transaction throughput and confirmation time, and it also has certain advantages over Solana and Avalanche. Sui excels in developer friendliness and scalability. However, Ethereum remains the leader in decentralization and security. As a new public blockchain project, Sui demonstrates impressive performance in terms of functionality and innovation, making it a project worth monitoring.

Conclusion

Sui Blockchain, a Layer 1 solution carefully crafted by Mysten Labs, showcases its technological strengths in high scalability and low-latency transactions. It also strongly supports Web3 and dApp development through its unique MOVE programming language. Sui Blockchain has received widespread industry recognition and significant financial backing, with its Series A funding and subsequent rounds led by FTX Ventures highlighting the market’s high expectations for its potential.

The steady increase in Sui Blockchain’s total value locked (TVL) further attests to the ecosystem’s vibrancy and innovative potential. With the mainnet launch and the introduction of applications like Sui Wallet and Sui Bridge, users and developers can anticipate a more seamless, secure, and efficient experience. The establishment of the Grayscale Sui Trust, in particular, provides a compliant investment avenue for SUI token investors, enhancing the token’s appeal and helping to boost its recognition in traditional financial markets. The positive movement in SUI’s price reflects market confidence in Sui Blockchain’s technical capabilities and prospects. With its innovative architecture, dynamic ecosystem, and strong community governance, Sui Blockchain is emerging as a formidable force in the cryptocurrency world. As more projects join and the technology continues to evolve, the future of Sui is brimming with potential.