Sui is a cutting-edge Layer 1 blockchain designed for unmatched scalability and speed. It aims to transform how decentralized applications (dApps) operate. Understanding Sui's tokenomics and functionality is essential whether you're looking to invest, stake, or actively participate in the ecosystem.
In this guide, we'll cover the fundamentals of the Sui network and what to expect from this blockchain in 2025.
What is Sui?
Sui offers a fresh look at blockchain technology. It operates as a high-speed digital network where each asset exists as its object. The Sui coin is at the heart of the Sui Network, which fuels everything from governance to transaction processing and staking.
Created by former Meta engineers in May 2023, Sui processes transactions differently from traditional blockchains. Instead of processing one transaction at a time, it functions more like a multi-lane highway, allowing multiple transactions to move forward simultaneously.
This design, combined with the Move programming language, enables the platform to handle over 4.58 billion transactions across 18.19 million active accounts while maintaining speed and security.
Who created Sui
Mysten Lab founders Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Chalkias are core members of the Sui team. They’re all former Meta engineers who worked in the Novi division.
Mysten Labs is backed by various investors, including Andreessen Horowitz (a16z), who invested $36 million in the company in December 2021 in a Series A round. This was followed by a $300 million Series B announcement, led by a $140 million commitment from FTX Ventures, valuing the startup at $2 billion.
Other funds that have committed to Mysten Labs include Jump Crypto, Apollo, Binance Labs, Franklin Templeton, Coinbase Ventures, Circle Ventures, Lightspeed Venture Partners, Sino Global, Dentsu Ventures, Greenoaks Capital, and O'Leary Ventures.
What makes Sui Different From Other Blockchains?
Here are the key features that make Sui unique among other L1 blockchains:
Object-based design
Sui's object-based design is a foundational principle differentiating it from traditional blockchain architectures. In Sui, all on-chain data, including user accounts, tokens, and smart contracts, are treated as objects. These objects have a unique structure and are managed with Sui's Move-based programming language. Here’s how the design works:
Objects and Ownership
In Sui, every piece of data is represented as an object, uniquely identified by an Object ID. Objects can be immutable or mutable. These objects are either owned by an account (private ownership) or are shared across the network (shared ownership). Private objects are associated with a single owner, and operations on them are simpler and more efficient since they don’t require consensus. Shared objects require consensus for operations. They are used for use cases like decentralized applications where multiple participants interact with the same data.
Object States
Each object maintains its state and versioning. When an object is modified, a new version is created while retaining the previous versions for transparency and traceability.
Move Programming Model
Sui developers use the Move programming language to define object types, rules, and methods. Move enforces strict safety and guarantees around object ownership and state transitions. For instance, a token in Sui would be defined as a Move object with methods to transfer, mint, or burn.
Benefits of Sui's Object-Based Design
Here are the key benefits of Sui's innovative object-based design:
- Scalability: Sui's ability to execute transactions in parallel, thanks to the separation of independent objects, enables high throughput and low latency.
- Modularity: The self-contained nature of objects makes it simpler to develop, modify, and maintain applications.
- Security: Clear ownership rules and state transitions help minimize the risk of errors and vulnerabilities.
- Flexibility: Developers can create intricate interactions between objects while benefiting from efficient execution for independent transactions.
Transaction Processing on Sui
The Sui Blockchain processes transactions in two main ways: single-owner and shared object transactions. Understanding these types is vital to understanding how Sui handles data and runs smart contracts efficiently.
Single-owner transactions are actions one address takes, like creating new tokens or launching smart contracts. Only one party controls these transactions, and they initiate all the actions.
On the other hand, shared object transactions involve multiple addresses working together for a common goal, such as joining an auction. In these cases, all parties must agree and confirm the transaction
The process of completing a Sui transaction involves the following steps:
- User submission: A user starts a transaction and sends it to a full node in the Sui network.
- Validation and broadcasting: The full node checks if the transaction is valid and shares it with a group of validators.
- Signature gathering: The validators sign the transaction to create a certificate that proves it is valid.
- Certificate broadcast: This certificate is sent out to more validators for additional verification.
Unlike many L1s that deal with transactions one after another, Sui uses its object-oriented design to run transactions simultaneously. This means that transactions occur simultaneously instead of waiting for one to finish before starting the next.
This parallel execution has two main benefits: it makes transaction processing faster and helps prevent network congestion. By validating and sharing transactions individually instead of in groups, Sui can keep the network running smoothly, even when there is a lot of activity.
Sui's Proof-of-Stake Consensus
The Sui Blockchain uses a proof-of-stake (PoS) system for its staking program. This method is vital for securing the network and validating transactions. PoS is popular because it uses less energy and is better for the environment than proof-of-work (PoW) systems.
In Sui, the consensus mechanism depends on token holders to help maintain the network. Token holders can delegate their Sui tokens to validators, who confirm transactions and maintain the blockchain's integrity.
Sui’s consensus system has two key components: Narwhal and Bullshark. These components help the PoS system run smoothly.
Narwhal helps solve a common problem in blockchain networks: slow transaction processing during high demand. It acts as a fast memory pool, speeding up transaction processing and improving efficiency. Narwhal also ensures that Bullshark, the consensus engine, is ready to use data.
Bullshark uses a Byzantine Fault Tolerance mechanism to verify the legitimacy of transactions and distribute them throughout the network. This crucial component is essential for maintaining a consensus and safeguarding the security and reliability of the Sui Blockchain.
This approach supports Sui's goal of creating a strong and high-performing blockchain ecosystem for various Web3 applications.
Tokenomics of Sui
Sui’s tokenomics are designed to support its blockchain ecosystem, reward contributors, and maintain network stability. Here’s a detailed breakdown of Sui tokenomics
As of December 23, 2024, the Sui (SUI) coin has the following key metrics:
Circulating supply: Approximately 2.9 billion Sui tokens are currently in circulation, representing about 29% of the total supply of 10 billion tokens.
Fully Diluted Valuation (FDV): With a total supply of 10 billion tokens and a current price of around $4.13 per SUI, the FDV is approximately $41.3 billion.
Market capitalization: The current market cap is approximately $12.66 billion, placing $SUI among the top 20 cryptocurrencies by market cap.
Token unlock schedule: Sui follows a structured token release schedule with significant monthly unlocks. On December 3, 2024, a substantial token unlock valued at approximately $215 million occurred, increasing the circulating supply.
Staking participation: A notable portion of SUI is staked within the network. Interestingly, the staked amount exceeds the circulating supply due to the Sui Foundation staking locked and non-circulating tokens. As of recent data, approximately 7.83 billion SUI are staked, indicating a high staking ratio.
Utility
- SUI is used to pay transaction fees.
- Gas fees incentivize validators to process transactions and maintain network integrity. The fees are dynamically adjusted based on network demand.
- Token holders can stake SUI to participate in the Proof-of-Stake (PoS) consensus mechanism. Stakers earn rewards proportional to their stake, derived from transaction fees.
- Delegators can assign their tokens to validators and earn a share of staking rewards. Part of the gas fees goes into a storage fund to compensate validators for long-term storage costs.
- SUI holders can participate in governance by voting on protocol upgrades, network parameters, and other key decisions.
- SUI facilitates the transfer of value within the ecosystem, including payments for services or goods in decentralized applications (dApps).
SUI Token Allocation
The fixed supply of 10 billion SUI is distributed as follows:
Category | Percentage | Purpose |
|---|---|---|
Community Reserve | ~50% | Grants, ecosystem development, and community incentives. |
Early Contributors | ~20% | Reward for developers, builders, and early network contributors. |
Investors | ~14% | Supporters and investors who provided funding in the early stages. |
Mysten Labs Treasury | ~10% | Reserved for core team members and long-term project sustainability. |
Public Sale | ~6% | Available to the public during token sales or auctions. |
Token Release Schedule
Sui (SUI) has a structured token release schedule for 2025, with significant unlock events planned throughout the year. Here's an overview of the upcoming token unlocks:
January 1, 2025
- Unlock Amount: Approximately 64.19 million SUI.
- Percentage of Total Supply: 0.64%.
- Estimated Value: $296 million based on current market prices.
January 3, 2025
- Unlock Amount: Approximately 74.1 million SUI.
- Percentage of Total Supply: 0.74%.
- Estimated Value: $333 million based on current market prices.
Subsequent Monthly Unlocks
- Frequency: Monthly scheduled throughout 2025.
- Unlock Amount: Varies per month; specific details can be found on platforms like CryptoRank .
- Purpose: These unlocks are part of the vesting schedules for various stakeholders, including early contributors, investors, and community reserves.
Significant token unlocks can influence supply and demand, potentially affecting SUI's market price. Investors should monitor these unlock events and consider their potential impact on the market.
For detailed information on unlock dates and amounts, refer to the official Sui documentation and reputable tracking platforms.
Deflationary measures
Gas fees are partially burned, reducing the circulating supply of SUI over time. Burning creates a deflationary pressure, balancing the fixed supply. The storage fund mechanism ensures validators are compensated fairly without inflating the token supply.
Which dApps run on the Sui network?
Sui's ecosystem supports various applications that make digital interactions simpler and more efficient. The platform currently powers:
- Decentralized finance applications
- Lending and borrowing platforms
- Automated market makers
- Yield farming protocols
- Gaming platforms with real-time transactions
- Player owned assets
- Instant rewards distribution
- Seamless in-game trading
Sui network performance and growth
The Sui community represents a diverse group of users across multiple sectors. Regular traders comprise the largest segment at 45%, followed by DeFi participants at 30%. NFT collectors account for 15% of the user base, while gamers represent 10%. These numbers reflect growing adoption across different use cases, with new users joining daily through various entry points.
How to buy $SUI
Getting started with SUI involves a straightforward process:
- Choose a compatible cryptocurrency exchange.
- Create and verify your account.
- Add funds through bank transfer or credit card.
- Place an order to buy SUI.
- Transfer tokens to your Tangem Wallet.
Which crypto wallets support SUI?
Several secure wallet options exist for storing SUI:
- The official Sui wallet provides specialized features designed specifically for the ecosystem.
- Users requiring maximum security often choose hardware wallets like Tangem Wallet for long-term storage.
- Mobile wallets offer convenient access to daily transactions.
- Web-based wallets seamlessly integrate with decentralized applications (dApps).
Each wallet type serves different user needs while maintaining consistent security standards.
Security and risk factors
Sui's security is based on multiple layers of protection that work together. The Move programming language's design provides a strong foundation for security. Meanwhile, validator networks continuously monitor transactions.
Regular security audits and community bug bounty programs add even more layers of protection. As a result, Sui has a comprehensive security framework that effectively protects user assets.
Final
Sui is a groundbreaking advancement in blockchain technology. Its distinctive object-based design and efficient transaction processing make it a standout choice for developers and users. The platform successfully combines high-security standards with user-friendly features, creating a robust ecosystem that benefits both parties. As its adoption grows, Sui proves its worth through its reliable performance and ever-expanding capabilities.