1. The Origin of Sui
The origin of the Sui blockchain can be traced back to Meta's (formerly Facebook) blockchain project Diem and the digital wallet Novi, which were shut down in 2022 due to regulatory hurdles. The legacy of Diem continues in two independent blockchains: Aptos and Sui. Sui was developed by Mysten Labs, founded in 2021 by former Novi team members, with core members having extensive experience in programming, security, and distributed systems. Mysten Labs completed two rounds of funding in 2021 and 2022, raising over $300 million, which has driven the development of Sui. The Sui mainnet was officially launched on May 3, 2023.
2. The Technology of Sui
2.1 Object-Centric Data Model
A key feature of Sui is its object-centric data model, which differs from other smart contract platforms like Ethereum, Solana, and Aptos, which track state through accounts, or like Bitcoin and Cardano, which use the UTXO model. Sui adopts a hybrid model, where history is stored in objects with unique IDs, and these objects contain metadata such as ownership and transaction history, with the global state being the collection of all objects. Sui's structure is similar to a directed acyclic graph (DAG), where objects are the vertices and transactions are the edges.
In Sui, transactions take objects as inputs and generate new or modified objects. Sui can process object interactions in parallel, as transactions are grouped and processed by object, and when multiple transactions are submitted simultaneously, validators can process them in parallel on different machines as long as the transactions do not depend on each other. This system has a unique scalability, as the network capacity increases with the addition of more validator nodes.
Objects on Sui are of four ownership types: owned by a single address, owned by other objects, shared objects (such as decentralized exchanges), and immutable read-only objects (such as frozen contracts). This flexible model provides the foundation for large-scale parallel processing and network expansion.
2.2 Sui Move
Solidity is the programming language for the Ethereum Virtual Machine (EVM), and it has become the most popular blockchain language since its release in 2015. The ERC-20 token standard was proposed in 2015 as a solution to the limited native resource manipulation capabilities of the EVM, driving the ICO boom in 2017 and the DeFi development in 2020. However, as blockchains have increasingly focused on programming digital assets, the Novi/Diem team developed the Move language based on this concept.
Mysten Labs has adapted the Move language into Sui Move, integrating its object-centric data model. Sui Move supports smart contracts and digital assets, ensuring native security of resources through the Move bytecode verifier, which statically analyzes to ensure object safety and prevent vulnerabilities such as double spending and reentrancy. The automatic security rules provided by the bytecode verifier give Sui Move higher security.
Other blockchains rely on smart contract developers to manually write security rules, a method more prone to security vulnerabilities. For example, the Wormhole vulnerability in the Solana ecosystem, the Cashio vulnerability, and the DAO Hack on Ethereum, all suffered massive losses due to the failure to properly implement account and reentrancy checks, whereas the Sui Move bytecode verifier effectively avoids these issues.
2.3 Consensus
Sui validators differ from traditional blockchains in that they do not pack transactions into blocks, but instead individually validate transactions, reducing network latency. Transactions are grouped by object, allowing validators to process transactions on different objects in parallel, improving the execution efficiency of large-scale transactions.
Sui reduces the communication needs between validators by delegating most communication tasks to user client gateways (such as wallets and applications). Although this appears to add a layer of trust, it is similar to the trust requirement in using client-side wallets on Ethereum. Users can intuitively see the impact of transaction signatures on objects, allowing them to understand the consequences of transactions.
In Sui, all transactions require client-side participation, and whether transactions need ordering and consensus depends on the object type. If shared objects are involved, ordering and consensus are required.
2.4 Complex Transactions (Shared Objects)
Complex transactions involving shared objects are ordered and consensused through Sui's Narwhal and Bullshark protocols. Narwhal maintains the availability of submitted transaction data in a mempool and provides a structured path in the form of a directed acyclic graph (DAG) to traverse (choose an order) this data. Bullshark consensus agrees on a specific DAG traversal (ordering based on the DAG structure) to select the specific ordering of this structured data.
Complex transactions go through five steps before reaching a final result:
- Transactions are broadcast from their respective users/clients to the nodes.
- Validator nodes receive the messages and vote on the validity of the messages, with the weight of their votes proportional to their stake.
- Users/clients collect a quorum of these votes that are Byzantine fault-tolerant, generating a certificate of record and broadcasting it back to the validators.
- The transaction certificate is ordered through Narwhal and Bullshark, with a Byzantine fault-tolerant majority of validators agreeing on the ordering of the transaction data.
- Validators make a final response when the user collects an "effects" certificate, which is proof of the state change and ensures the finality of the transaction.
2.5 Simple Transactions (Non-Shared Objects)
Simple transactions, involving only non-shared objects, do not require ordering through Narwhal and Bullshark. In other words, simple transactions can skip the fourth step of the transaction processing pipeline mentioned above. Simple transactions are subject only to a lightweight algorithm called Byzantine Reliable Broadcast, which is weaker than Byzantine consensus and more scalable. Broadcast ensures that all nodes receive the same message from the user/client; it does not require nodes to agree on the state of the network, which is a complex part of consensus algorithms.
Sui's data model allows validators to execute transactions in parallel based on causal ordering, rather than total ordering (ordering transactions in sequence). Causal ordering (how a transaction affects the state of a particular object) allows Sui to group transactions by object. Therefore, if multiple transactions are unrelated (do not touch the same object), these transactions can be processed in any order in parallel. However, transactions occurring on the same object need to be totally ordered in that object's transaction queue. All simple transactions bypass consensus.
Sui's mid-2023 tests have shown it can achieve a throughput of 297,000 simple transactions per second with latency under half a second. This speed, combined with the modular nature of the ordering/consensus algorithms, has attracted blockchains like Celo and Sommelier to integrate Narwhal into their protocols.
2.6 DPoS
Sui uses a delegated proof-of-stake mechanism to determine the validator set for each epoch. The total amount of stake allocated to each validator (including their own stake and stake delegated by other SUI token holders) determines their voting power in processing transactions. All honest validators are rewarded with gas fee rewards (see below) and temporary unstaking subsidies (Sui has not specified an exact end date) as incentives.
Sui's system of paying all honest validators differs from systems that only pay validators for the transactions they process. In these systems, larger validators grow faster in probability, as they are more likely to be selected and receive rewards faster than validators with smaller stakes. In Sui, all honest validators grow at the same rate. Delegators only receive rewards calculated from gas fees and inflation subsidies, but must pay commissions to the validators they have staked with.
Sui's testnet has 97 validators, with only two operated by Mysten Labs. The recommended hardware requirements for validators include 24 physical CPU cores or 48 vCPUs, 128GB of memory, and 2TB of SSD storage (NVMe recommended).
2.7 Gas Fees
SUI gas fees consist of two components: computation and storage.
2.8 Computation Gas Fees
Computation gas fees are determined by a gas pricing mechanism, where validators set a minimum gas price for the current transaction. They then publish a "reference gas price" at the 66th percentile price. Sui incentivizes validators to keep prices low, but ultimately lets the validator market determine the gas price. Users are allowed to use "tips" above the reference price to get higher priority for their transactions. Therefore, the computation gas price is the sum of the reference price and the tip.
2.9 Storage Gas Fees and Storage Fund
Validators (but not delegators) receive rewards from a storage fund, which depends on the initial block size committed to the fund.
Sui's storage fund is a means of providing funding for data storage on the network. By increasing the ability to store any amount of data, Sui has built a common solution to the data storage problem: in an environment where the validators who initially stored the data may be different from the validators who maintain that stored data in the future. Sui's storage fund receives storage Gas fees and a portion of the network's staking rewards (calculated as Gas fees plus inflation/unlocked SUI). The staking rewards accumulated in the storage fund are immediately redistributed to the validators. Users who store files on Sui can reclaim all the storage Gas fees they paid when they delete those files from storage. Storage Gas fees are never paid to the validators.
The storage fund imposes temporary deflationary pressure on the SUI token. When there is high storage demand, fees will increase and more SUI will be taken out of circulation to be distributed later.
2.10 Programmable Transaction Blocks (PTBs)
Sui supports a developer primitive called Programmable Transaction Blocks (PTBs). PTBs allow users to create a composable sequence of up to 1024 transactions that can atomically fail or succeed (all-or-nothing). When packaging transactions into a PTB, Sui can execute up to 1024 operations. This approach increases transaction throughput and reduces the average cost per transaction.
PTBs can take many forms. They can be used for homogeneous batching, such as mass minting of Non-Fungible Tokens or sending multiple payments to various parties at once. They can also be used for heterogeneous purposes, using the outputs of earlier transactions as inputs for further processing. For example, Sui's testnet has a DeFi-related PTB with 12 operations: 5 swaps across 3 different pools, mutating 20 existing objects and creating 7 new objects in the process.
2.11 Abstract Gas
Sui also provides users with the option to sponsor transactions. Sponsored transactions are where a user, typically an application, pays the gas fees for consumers interacting with the sponsor's platform. Co-founder Evan Cheng believes that "the notion of paying gas should be invisible". Cheng's belief is being realized on Sui through enabling anyone to establish a Sui gas station to back sponsored transactions.
2.12 Horizontal Scalability
Sui's architecture achieves high scalability by eliminating the need for global transaction ordering consensus through object grouping and causal ordering. By adding more "worker" validators or upgrading hardware resources, Sui can efficiently process large volumes of transactions (11,000 to 297,000 transactions per second) under various workloads, supporting a wide range of applications including social media, payments, and oracle networks.
Furthermore, Sui is not limited to just transaction processing, but also has storage protocol capabilities. It can store complex assets (such as all the parts of an Non-Fungible Token) on-chain without relying on off-chain storage, scaling in the same way as transaction processing, by adding more workers to increase capacity.
3. The SUI Ecosystem
The SUI ecosystem is rapidly expanding, covering a range of applications including on-chain games, Non-Fungible Token markets, cross-chain protocols, and DeFi protocols. Sui is partnering with multiple collaborators to build the ecosystem, aiming to become a core infrastructure for the next generation of high-performance public blockchains.
Mainnet Launch and Future Development:
In 2023, the Sui mainnet was launched, garnering widespread attention from the crypto community. With its unique architecture, Sui has demonstrated significant advantages in performance, scalability, and development flexibility, laying a solid foundation for its future large-scale adoption. In 2024, the Sui blockchain continued to grow rapidly, focusing on improving its ecosystem and driving adoption, achieving several key milestones:
- Expansion and Ecosystem Growth: Since the mainnet launch in May 2023, as of September 2024, Sui has surpassed 18 million active users. Sui has attracted a large number of decentralized finance (DeFi), Non-Fungible Token, and on-chain gaming projects, leading to a significant increase in user numbers.
- Technological Advancements: In 2023, Sui launched the zkLogin feature, allowing users to log in to decentralized applications (dApps) using Web2 credentials (such as Google or Facebook), bridging the gap between Web2 and Web3 and simplifying user interaction with blockchain applications. Additionally, Sui released RPC 2.0 in early 2024, adopting a new GraphQL API, significantly improving developer data querying speed and flexibility.
- Native USDC Integration: In October 2024, Sui became one of the few blockchains to have native USDC, eliminating the need for bridging through other networks. This has improved the liquidity of DeFi protocols built on Sui and ensured more secure and efficient fund transfers. (Native USDC is directly issued and backed by Circle.)
By issuing USDC on emerging blockchains like Sui and Base, Circle not only supports the ecosystems of these networks but also attracts more developers and users to participate. This strategic move not only helps these platforms grow rapidly but also promotes the adoption and innovation of blockchain technology as a whole.
4. SUI and DeFi
Sui was designed with DeFi applications in mind, with the following key advantages:
- High Performance and Fast Transaction Processing: Sui's unique transaction processing mechanism allows individual nodes to independently verify transactions, enabling it to achieve over 100,000 transactions per second. This high throughput and low latency make it well-suited for DeFi applications that require fast confirmations.
- Low-Latency Settlement Times: Sui's transaction settlement times are extremely short, typically between 400 milliseconds and 3 seconds, significantly reducing the time users have to wait for transaction confirmations and greatly improving the user experience of DeFi applications.
- Composability: Sui provides strong composability, allowing different DeFi protocols and applications to integrate with each other. Its Programmable Transaction Block (PTB) technology can combine multiple operations into a single atomic transaction, ensuring atomicity and reducing transaction costs, making it easier for developers to build complex financial products and services.
Overall, Sui's high performance, low latency, and composability make it an ideal platform for supporting sophisticated DeFi applications, driving the rapid development and future innovation of the blockchain finance ecosystem.
5. SUI Ecosystem Projects
Since the launch of its mainnet, the Sui ecosystem has expanded rapidly, attracting a large number of developers and enterprises.
Here is a simple overview of some of the projects that have launched on the Sui blockchain:
5.1 DeFi Projects:
According to DeFiLlama, there are currently 5 protocols with over $100 million in Total Value Locked (TVL):
Decentralized Exchange (DEX) Cetus: With $180 million in TVL, Cetus occupies a significant market position in the Sui ecosystem. As an efficient decentralized trading platform, Cetus provides a user-friendly trading experience, supports a wide range of token swap options, and allows users to participate in liquidity pools to potentially earn trading fee revenue.
DeepBook: DeepBook is the first order-book-based DEX in the Sui ecosystem, providing a decentralized liquidity layer for Sui. DeepBook is co-built by MovEX and the Sui Foundation and has been integrated into Sui's official framework.
Lending Protocol Navi: As the largest lending platform in the Sui ecosystem, Navi manages over $410 million in assets. This protocol allows users to collateralize their assets to borrow other assets, offering flexible capital utilization options and supporting various investment and financial strategies.
Scallop: Scallop, another key lending protocol, also has a significant presence in the Sui ecosystem, managing $170 million in assets. It provides users with additional capital utilization options, supporting the financial diversity and robust growth of the Sui ecosystem.
Suilend: Suilend is Solend's first project outside of the Solana ecosystem. By launching on Sui, Solend leverages the inherent security features integrated into the Move language to provide built-in protections for its smart contracts.
5.2 Wallet Solutions
OKX Wallet: As a comprehensive digital asset management tool, the OKX Wallet supports multi-chain functionality, including seamless integration with the Sui chain.
Sui Wallet: Sui Wallet is one of the most widely used wallets in the Sui ecosystem, known for its comprehensive features and user-friendly interface.
Suiet: Suiet (pronounced "sweet") is a self-custodial wallet built on the Sui blockchain, with all the contents being open-source.
5.3 Gaming Projects
SuiPlay0x1: A lightweight handheld gaming device that has already pre-sold over 2,000 units, with native Web3 capabilities, and plans for a global launch in 2025.
DARKTIMES: A battle royale game on Sui, developed by Blowfish Studios, the VIP game studio of Animoca Brands. DARKTIMES utilizes the unique properties of Web3 technology, hosting digital assets, including the $TIMES token, Genesis Non-Fungible Tokens, and various in-game character decorative items, on the Sui blockchain.
5.4 Meme Projects
Sui's this wave of memes, in fact, refers to many relatively successful memes on Solana, and combined with the water-based characteristics of SUI itself, it feels very familiar. It is worth mentioning that the meme fluctuations on Sui are currently relatively large, and there are also many risks. When rushing in, pay attention to safety and try to reduce the risk of being cut and being scammed.
The more well-known memes on the SUI chain are: $Hippo; $BLUB; $FUD.
6. SUI market performance
According to market data for 2024, SUI has performed well, showing a strong growth trend:
- Market capitalization growth: Since the fourth quarter of 2023, SUI's market capitalization has continued to rise, with a quarter-on-quarter increase of 120%, and a further increase of 176% in the first quarter of 2024.
- Price trend: SUI experienced price fluctuations in 2024, but the overall trend was upward, especially on October 14, 2024, when the price reached a historical high of **$2.3417**.
- Current price: As of October 15, 2024, the price of SUI is **$2.24**, up more than 100% in the past month.
7. SUI and Solana
Whether Sui has the potential to become the next Solana is a highly controversial topic. The following key points can help better understand Sui's position and potential in competing with Solana:
- Technical advantages: Sui adopts a parallel transaction processing design, which can theoretically achieve 120,000 transactions per second (TPS), while Solana's actual processing capacity is about 3,000 TPS. This high efficiency gives Sui an advantage in performance, but its actual performance still needs further verification.
- Developer support and community building: Although Sui's ecosystem is still in its infancy, and the number of applications is far less than Solana, Sui is actively attracting developers through funding and education programs. Solana, on the other hand, has already established a large and active community, and a stable user base provides it with continuous growth momentum.
- Market performance and competition: Sui has performed strongly at certain times, and even maintained a relative advantage during market consolidation periods. However, Solana's user experience is more mature, and it still dominates in terms of user activity and ecosystem stability.
- Risk factors: Sui's token economics have certain risks, as currently only 28% of the tokens are circulating in the market, which means that it may face greater selling pressure in the future. Solana's token circulation ratio is higher, around 80%, and the market fluctuations are relatively smaller.
- Future prospects: Although Sui has strong technical potential and a gradually expanding ecosystem, whether it can surpass Solana still requires time and market verification. Experts have different views on this, with some believing that Sui's technical advantages may make it a "Solana killer," while others believe that Solana's current ecosystem is more stable and difficult to replace.
In summary, as a new public chain, Sui has the potential to compete with Solana, but its future performance remains to be further observed.
Summary
The SUI project, with its innovative technical architecture and strong team support, has shown long-term development potential. Its unique object-oriented account model, native randomness, and zero-knowledge proof technologies have made SUI stand out in the blockchain field. Although SUI has achieved significant breakthroughs in technology, it still faces many challenges in the future. Therefore, while SUI's technical prospects are promising, potential investors should closely monitor the development progress of its ecosystem, especially the launch of new applications and innovations, and thoroughly assess the market risks before making investment decisions.
