Sui ’s technical capabilities and upcoming gaming platform releases could make the network a serious contender to Solana, but Sui tokenomics pose a potential threat.
Solana may be the leading alternative layer-1 network alongside Ethereum right now, but Sui Network could eventually compete for that spot, analysts from K33 Research speculate.
In a September 18 research note, DeFi analyst David Zimmerman of K33 said that Sui ’s performance compared to Solana, combined with its architecture and upcoming game console release, could make it a top contender among “alt L1s.”
“Solana often takes center stage in L1 battles, but while SOL/ ETH is up 6% since August open, Sui/ SOL is up 115% over the same period,” said Zimmerman.
While admitting that much of Sui ’s recent outperformance – with the network’s Sui Token up 36% last week – could be down to “mispricing,” Sui “certainly” has the right factors in place to support its recent price move up.
On September 17, stablecoin issuer Circle announced the upcoming launch of its native USD Coin on the Sui network, signaling deeper adoption and support of the network from key industry players.
Zimmerman explained that Sui has the technical chops to compete with Solana. Sui boasts a theoretical maximum of 297,000 transactions per second, compared to Solana 's theoretical maximum of 65,000.
Notably, there is a large discrepancy between the network's theoretical maximum TPS and the TPS it can actually achieve in practice, with Solana 's highest “real” TPS being nearly 3,000 and Sui 's peak maxing out at 854 in July 2023, according to CoinGecko data.
“Sui has created impressive technology, arguably the most impressive in the space. However, we have yet to see it outperform Solana in real-world use cases and on metrics like Medium daily TPS,” he said, adding that this could soon become a plausible scenario if Sui can continue to attract users and Capital to its ecosystem.
Zimmerman argues that Sui has a major obstacle that will impact its long-term price action: Token supply. He notes that Sui is launching in May 2023, a time when fully diluted value (FDV) Token with low/high floats are “very common.” As a result, only 27% of Sui ’s total token supply is in circulation, leaving current investors at risk of a significant sell-off when future Token Lockup unlocks occur.
For comparison, 80% of Solana 's total Token supply is currently in circulation.
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The article Sui Could Soon Be a Competitor to Solana: K33 Research appeared first on CoinMoi .
