1. Introduction
Since August, the SUI ecosystem has experienced a remarkable rise and has quickly become the focus of the blockchain and cryptocurrency field. The strong price performance and ecological development have sparked a lot of discussion in the industry, and many people believe that Sui is repeating Solana's trajectory before the big rise in 2021. As the most eye-catching Layer 1 public chain in the last round of market cycles, Solana has attracted a large number of developers and capital with its efficient consensus mechanism and highly competitive technology, and has driven the prosperity of the entire ecosystem. Today, Sui's performance has caused the market to begin to speculate: Will it become the next Solana? Does this round of Sui's rise mean that it will lead a new round of breakthroughs in the Layer 1 public chain field?
Although Sui's rapid development has aroused great interest in the market, a comprehensive analysis from multiple angles is still needed to fully understand its future development prospects. This includes not only an in-depth analysis of the fundamentals behind the price performance of Sui tokens, but also an exploration of the innovativeness of its underlying technology, the progress of ecological project construction, and the opportunities and challenges it faces in the global blockchain market. In this article, we will analyze various aspects of Sui's ecology in detail to help readers fully understand the rise of this emerging public chain, deeply analyze why Sui can stand out among many Layer 1 public chains, and look forward to its potential in the next round of market cycles.
2. A brief history of Sui Ecological Development
2.1 Team and Project Background
Sui is a Layer 1 blockchain launched by the Mysten Labs team. Mysten Labs was co-founded in 2021 by core members of the former Meta (Facebook) blockchain projects Diem and Novi. The founding team includes top experts in the technology field, such as Evan Cheng, George Danezis, Sam Blackshear, etc. They have deep accumulation in blockchain consensus mechanisms, programming languages, distributed systems, etc. Sui Chain aims to solve the performance bottlenecks of existing blockchains and provide more efficient, secure and scalable infrastructure.
Sui's mainnet was launched in May 2023 and quickly became a rising star in the blockchain field. As a blockchain based entirely on the Move language, Sui pays special attention to parallel execution and low-latency processing, and strives to improve the performance of blockchain in decentralized applications through unique architectural design, especially in high-demand fields such as DeFi, GameFi and NFT.
2.2 Financing and market attention
Sui has received a lot of capital support since the launch of the project, and completed a $36 million Series A financing in December 2021 and a $300 million Series B financing in September 2022, respectively, with participation from well-known institutions such as a16z Crypto, Jump Crypto, Binance Labs, and Coinbase Ventures. These financings have greatly increased Sui's market attention and provided a solid financial foundation for its technology development and ecological construction.
It is worth mentioning that although FTX Ventures led Sui's Series B financing in 2022, Mysten Labs paid $96 million to buy back shares from FTX in 2023 as FTX went bankrupt. This event marks the further strengthening of Sui's team's control over the project.
After the financing, Sui began to attract more and more attention in the global market, especially in the crypto community centered in Asia and North America. With the successful launch of the mainnet in May 2023, Sui gradually demonstrated its technical advantages and attracted a large number of developers to enter the ecosystem. At the same time, Sui's ecological construction has gradually got on track, and projects in multiple fields such as DeFi, NFT, and Meme coins have begun to rise on the Sui network.
On August 7, Grayscale launched Grayscale Sui Trust. Rayhaneh Sharif-Askary, head of product and research, said Sui is redefining the smart contract blockchain. This is not only a recognition of Sui's technology and market potential, but also makes global investors focus on the Sui ecosystem again. Grayscale's support has further boosted the market's recognition of Sui. The price of SUI tokens has doubled in a single week, becoming one of the focuses of the crypto market. At the same time, the total locked volume (TVL) of the Sui ecosystem has also maintained a high growth rate, and ecological projects have made key progress, indicating that the Sui ecosystem is rising rapidly.
2.3 Comparison between Sui and Solana: Competition among the new generation of public chains
Sui's development trajectory is quite similar to Solana's early development. As a star public chain in the last bull market, Solana has rapidly risen in the market with its high TPS (transaction processing capacity per second) and low latency processing, attracting a large number of developers and capital inflows, and ecological projects have flourished. Sui is following a similar path, trying to play an important role in the next round of market cycles through its unique architecture and consensus mechanism.
However, Sui is not a simple Solana clone. Although both emphasize high performance and low cost, Sui has significant differences in technical design. For example, Sui's parallel execution architecture enables it to process multiple independent transactions simultaneously, while Solana relies on single-line execution, which makes Sui more efficient in certain application scenarios. In addition, the Move language used by Sui also provides unique advantages in terms of security and flexibility, allowing developers to write complex smart contracts more efficiently.
3. Sui underlying technical features
Sui's underlying technical architecture makes it stand out among many current blockchain projects. As a Layer 1 blockchain, Sui not only leads other public chains in performance, but also introduces a number of unique technical innovations, which make it more suitable for scenarios such as DeFi, decentralized dApps, games, and NFTs.
3.1 Consensus Mechanism and Performance Advantages
The consensus mechanism determines the security, decentralization and transaction processing efficiency of the network. Sui has made bold innovations in this regard, using a parallel consensus engine based on the Narwhal and Bullshark protocols, and recently introduced a new consensus protocol - Mysticeti.
Narwhal-Bullshark consensus: The Narwhal and Bullshark consensus engine originally used by Sui is an innovative consensus protocol based on graph theory and voting mechanism. It significantly improves the throughput of the blockchain by separating the transaction transmission layer and the consensus layer. Narwhal is responsible for ensuring the durability of data before transactions enter the block, while Bullshark achieves transaction confirmation through a fast consensus algorithm. This architectural design allows Sui to maintain efficient operation under complex market conditions, ensuring that transactions can be processed and confirmed quickly.
Mysticeti consensus: To further improve network performance, Sui introduced the Mysticeti consensus protocol, a high-performance consensus protocol tailored specifically for Sui. By simplifying the consensus process, Mysticeti can achieve a consensus latency of approximately 390 milliseconds and a settlement finality of 640 milliseconds, which is 80% less than Narwhal-Bullshark. This extremely low latency ensures that Sui can still guarantee fast transaction confirmation under high transaction volumes, thereby bringing a smooth experience to users, especially in financial dApps and gaming applications, where low latency means that users can complete key operations in a very short time, avoiding transaction failures or high costs due to blockchain delays.
In addition, Sui's consensus mechanism is highly scalable and flexible. Its parallel execution design means that transactions in the network no longer need to be sorted linearly, which greatly improves throughput and can even process up to 297,000 transactions per second (TPS). This data makes Sui rank among the top in all public chains.
3.2 Parallel Architecture: Achieving Ultimate Efficiency
Sui's parallel architecture is one of its biggest advantages over other public chains. Traditional blockchains, such as Ethereum and Bitcoin, usually use a serial transaction execution mode, which means that all transactions need to be processed and confirmed in sequence. While this mode ensures network security, it severely limits the throughput of the blockchain, especially in high-concurrency scenarios, where the network is prone to congestion, resulting in higher transaction fees and longer processing times.
Parallel execution design: Sui's parallel architecture allows multiple independent transactions to be executed simultaneously in different threads. This parallel processing mechanism breaks the performance bottleneck of traditional blockchains. Under this architecture, unrelated transactions can be executed in parallel, which greatly improves the processing capacity of the network. This is especially important for complex application scenarios such as decentralized finance, NFT markets, games, etc. For example, in the DeFi field, different transactions of users often involve different asset pools and contracts. If the serial execution mode is adopted, transactions may wait for each other. Sui's parallel architecture ensures that these transactions can be executed simultaneously without interfering with each other, greatly improving transaction processing efficiency and user experience.
Scalability and user experience: The parallel architecture not only improves transaction processing speed, but also improves the scalability of the network. With the influx of more applications, traditional blockchains are prone to expansion bottlenecks, but Sui avoids this problem through parallel execution, laying the foundation for large-scale applications of the network in the future. In addition, Sui's transaction fees are almost negligible, which allows users to freely explore applications on the network without worrying about high gas fees. For developers, low transaction costs mean that they can design and deploy complex smart contracts more freely on Sui without having to worry too much about the additional costs caused by network load.
3.3 Move language: building secure and flexible smart contracts
The Sui network uses Move as its smart contract programming language. Move was first developed by Facebook (Meta)'s Diem project and is a programming language designed specifically for blockchain and smart contracts. Compared with traditional blockchain languages such as Solidity, Move has higher security, verifiability, and flexibility.
Security and flexibility
The Move language was designed to enhance the security of smart contracts and avoid common blockchain vulnerabilities such as reentrancy attacks and memory overflows. In the Move language, assets are "first-class" objects, which means that every token, NFT, or other blockchain asset is a native object in Move, and developers need to follow strict rules when dealing with these objects. This object model makes asset operations more intuitive and safe, thereby reducing the possibility of developers making mistakes when writing complex contracts. In addition, Move also supports formal verification, and developers can use mathematical tools to verify the correctness of the contract before deploying it to ensure that it does not have logical errors or security vulnerabilities.
Developer-friendly design
Compared with other blockchain programming languages, Move is very developer-friendly. Its modular design allows developers to easily reuse code, improving development efficiency. In addition, Move has natural advantages in resource management and concurrent operations, which makes it particularly suitable for building complex financial applications and high-frequency trading scenarios. On the Sui network, Move's application potential has been widely recognized by the developer community, and more and more projects choose to develop and deploy smart contracts on Sui, which further promotes the development of the Sui ecosystem.
3.4 Developer Tools and Ecosystem Support
Sui provides developers with a complete tool chain, greatly reducing the threshold for developing decentralized applications. Sui's development tools include SDK, API, documentation, and multiple development frameworks, which can help developers quickly get started and efficiently build and deploy applications.
The Sui team attaches great importance to the construction of the developer ecosystem. In addition to providing comprehensive development tools, Sui also attracts global developers to join the ecosystem through hackathons, developer competitions, community rewards, etc. Through these activities, Sui not only improves its popularity in the global blockchain developer community, but also promotes the birth of a large number of innovative projects. This active developer community has laid a solid foundation for the continued development of Sui in the future.
3.5 Low transaction fees and user experience
The Sui network also has significant advantages in terms of transaction fees. Traditional Layer 1 public chains, such as Ethereum, often experience extremely high transaction fees during periods of high load, which greatly affects user experience. Sui, through its efficient consensus mechanism and parallel execution architecture, keeps transaction fees at an extremely low level, almost negligible.
This low-cost design not only lowers the threshold for users to use dApps, but also provides more opportunities for the development of new projects. Developers can focus on improving products and user experience without having to worry too much about the limitations brought by high network fees.
4. Construction and development status of Sui ecological project
Since the launch of the Sui mainnet, significant progress has been made in the construction and development of the Sui ecosystem. Similar to other Layer 1 public chains, Sui has attracted a large number of projects such as DeFi, dApp, NFT and Meme coins to settle in through its efficient underlying technology, low transaction costs and friendly developer support.
4.1 Overview of Sui Ecosystem
Sui Ecosystem currently covers multiple fields, including decentralized exchanges, lending protocols, liquidity pledge, NFT, Meme Coins, and GameFi, etc. The emergence of these projects has not only led to a rapid increase in the number of users of Sui Ecosystem, but also promoted the continuous increase in the total locked-in TVL of the ecosystem.
According to DefiLlama data, as of October 16, 2024, the TVL of Sui Ecosystem has exceeded 1 billion US dollars, maintaining a remarkable growth rate. This shows that Sui still has strong growth momentum throughout the market downturn, and the expansion speed of ecological projects is remarkable.
4.2 Rapid Expansion of DeFi Ecosystem
DeFi projects are one of the most active areas in the Sui ecosystem. They have become an important pillar of the Sui ecosystem by providing services such as lending, liquidity pools, and decentralized exchanges. The following is an introduction to several representative projects in the Sui DeFi ecosystem:
NAVI Protocol: NAVI is one of the largest lending protocols on Sui, with a locked-in volume of $350 million, making it the leader of the Sui DeFi ecosystem. NAVI provides lending services for a variety of assets, including stablecoins (such as USDC, USDT) and Sui's native token SUI. NAVI users can also receive additional liquidity incentives through deposits, which has attracted a large number of users to participate in deposit and lending activities on the platform.
Cetus: Cetus is a decentralized exchange in the Sui ecosystem. It uses the automated market maker (AMM) model and has become one of the most traded DEXs on Sui. Cetus' average daily trading volume exceeds $118 million, and it has the best liquidity in trading pairs of mainstream tokens such as SUI and USDC. Cetus also introduced the centralized liquidity market maker (CLMM) model, which allows liquidity providers to provide liquidity in a smaller price range, further improving the efficiency of capital utilization.
Suilend: As Sui's second largest lending protocol, Suilend has innovated in liquidity pledge. Suilend's locked position has reached 190 million US dollars, and it mainly provides lending services for assets such as SUI, USDC, and ETH. In addition, Suilend has attracted a large amount of liquidity deposits into the platform by providing additional SUI rewards, and has become an important liquidity center in the Sui ecosystem.
Scallop: Scallop is another important lending protocol on Sui, with a TVL of $160 million. Compared with NAVI, Scallop provides more incentive mechanisms, including weekly veSCA token rewards and liquidity mining rewards. Users of the Scallop platform can not only borrow mainstream assets such as SUI and USDC, but also participate in other decentralized financial products provided by the platform.
Aftermath: Aftermath Finance is a decentralized exchange based on Sui. The platform aims to give users a CEX-like experience with the added security of self-custody. Aftermath also supports SUI's liquidity staking (afSUI), where users can earn additional income by providing liquidity. With a TVL of over $100 million, Aftermath has become an important DeFi hub within the Sui ecosystem.
Haedal: Haedal is one of the first liquidity staking protocols on Sui, focusing on providing users with liquidity staking services for SUI tokens. Haedal not only supports traditional staking, but also allows users to participate in governance and obtain additional rewards in a decentralized manner. Its flexible staking mechanism has attracted a large number of users to participate.
DeepBook: DeepBook is a shared decentralized central limit order book exchange built for the Sui ecosystem, focusing on efficient order book trading. It provides users with support for high-frequency trading and complex order types through advanced matching mechanisms. On October 14, DeepBook announced on X that the native token DEEP and DeepBook V3 have been launched on the Sui mainnet.
These DeFi projects not only promoted the growth of Sui's locked-in amount, but also increased the activity and usage of the network. With the introduction of more DeFi projects and innovative products, Sui is expected to become one of the important players in the field of decentralized finance.
4.3 Meme coin ecosystem is gaining popularity
In the Sui ecosystem, Meme coin is another outstanding area. Since September 2024, the transaction volume of Meme coin on Sui has risen rapidly, becoming one of the key factors driving the transaction activity on the chain.
HIPPO: HIPPO is a popular MEME coin on the SUI chain, created to celebrate the world's cutest hippopotamus, sudeng. Under the new community-driven management, the team will donate a portion of the profits to wild animals in need around the world. First, support will be provided to the Khao Kheow Zoo, which raises "Moo Deng". The current market value of HIPPO has reached $100 million.
BLUB: BLUB is another meme coin in Sui's ecosystem. Its image is a distinctive "dirty fish" that incorporates pop culture elements such as Pepe. BLUB's market value has reached 40 million US dollars, attracting a large number of community users to participate in its liquidity pool.
FUD: FUD was airdropped to the Sui community for free in December 2023, and quickly accumulated a large number of users. The total supply of FUD is 100 trillion, part of which is used for liquidity provision and the other part is used for community rewards. The current market value of FUD has reached 37 million US dollars, with more than 48,000 on-chain holders.
AAA: AAA Cat is a dark horse meme project on Sui that has performed well. Inspired by the black cat emoji package released by Sui Name Service, AAA Cat has increased by more than 14 times in just two weeks. AAA Cat has a very active community and has become a force that cannot be ignored in the Sui ecosystem.
Sui's Meme coin craze not only boosted the activity on the chain, but also made an important contribution to its transaction volume growth, greatly boosting the number of daily active users on the network. The rise of Meme coins in the Sui ecosystem proves that as a community-driven economic form, it can effectively attract new users and increase user stickiness.
4.4 Infrastructure and cross-chain support
The success of Sui's ecosystem is inseparable from its strong infrastructure support. Infrastructure projects such as cross-chain bridges, oracles, and stablecoins provide a solid technical foundation for Sui's DeFi and dApps, further enhancing Sui's competitiveness in the Layer 1 public chain.
Wormhole Cross-Chain Bridge: Wormhole is one of the most important cross-chain bridges on Sui. Through Wormhole, users can transfer assets on other blockchains (such as Ethereum, Solana, etc.) to Sui for trading and use. Portal Bridge (a function of Wormhole) has transferred more than $55 million in assets to Sui.
Pyth Network Oracle: Pyth Network is the largest oracle protocol on Sui, with a guaranteed value of up to $939 million. Many top protocols in the Sui ecosystem, such as NAVI, Scallop, and Suilend, all rely on the price data services provided by Pyth. This provides reliable on-chain data support for decentralized financial applications in the Sui ecosystem.
Stablecoin support: The stablecoins in Sui ecosystem mainly include USDC and USDT. In addition, it also supports cross-chain wrapped stablecoins from other chains. AUSD launched by Agora is the first stablecoin on Sui supported by RWA (real world assets), further enriching Sui's native asset ecology. With the introduction of more cross-chain bridges and stablecoins, Sui's financial infrastructure will be more sound.
V. Opportunities and challenges of ecological development
Since Sui's launch, it has attracted widespread attention from global blockchain developers and investors with its unique technological advantages and rapidly developing ecosystem. However, in the fierce competition environment of Layer 1 public chains, Sui has both good development opportunities and challenges that cannot be ignored.
5.1 Opportunities of Sui Ecosystem
Technical advantages of high performance and low cost
Sui's underlying technology, especially its parallel execution architecture and efficient consensus mechanism, gives it significant advantages in performance and cost. Compared with other Layer 1 public chains, such as Ethereum and Solana, Sui's transaction speed is faster and transaction costs are lower. It is especially suitable for high-frequency transactions and application scenarios that require real-time response. The Mysticeti consensus engine adopted by Sui greatly shortens the transaction confirmation time and improves the overall throughput of the network by processing multiple transactions in parallel.
Move's developer appeal
Sui Network uses the Move language as a writing tool for smart contracts. This language has extremely high security and flexibility, providing developers with a more intuitive and secure development environment. The modular design and efficient resource management functions of the Move language enable developers to build complex applications with less code while reducing security vulnerabilities. The advantages of the Move language are particularly reflected in the DeFi and gaming fields. Developers can use Move to create more secure and flexible smart contracts, which also increases Sui's attractiveness to developers.
The explosive growth of the DeFi ecosystem
Sui's DeFi ecosystem is expanding at an astonishing rate, and the rapid rise of many DeFi projects has provided a steady stream of liquidity support for the Sui network. For example, projects such as NAVI, Scallop, and Cetus have become the core driving force in the Sui ecosystem. As the DeFi market continues to expand, Sui will have the opportunity to attract global users through more innovative financial products and further increase its total locked volume.
The popularity of meme culture
Meme projects in the Sui ecosystem have also shown strong growth momentum. Similar to the rise of Meme culture in the Solana ecosystem, Meme coin projects such as FUD, BLUB, and AAA Cat in the Sui ecosystem have brought a large amount of on-chain transaction volume and user activity to Sui. The outbreak of Meme projects has not only contributed an important share to the transaction volume on the Sui chain, but also brought many new users.
Support from global capital and investment institutions
Sui's financing situation is one of the important driving forces behind its rapid rise. The support of well-known investment institutions including FTX Ventures, a16z Crypto, Jump Crypto, Coinbase Ventures, etc. not only provides Sui with sufficient financial support, but also provides strong backing for the construction of its ecosystem. Grayscale's launch of a trust product dedicated to Sui has also enhanced investors' confidence in its long-term development.
5.2 Challenges of Sui Ecosystem
Fierce competition with other Layer 1 public chains
Although Sui has many advantages in terms of technology, the competition in the Layer 1 public chain market is extremely fierce. Ethereum, as the public chain with the highest market share, is still the first choice for developers and users, while emerging public chains such as Solana, Avalanche, Aptos, and Base are also accelerating the layout of their own ecosystems. Although Sui has high technical competitiveness, it still needs to face the ecological barriers and market foundation of other public chains.
In addition, Layer 2 expansion solutions (such as Optimism and Arbitrum) are gradually maturing. These Layer 2 networks have gradually solved the bottlenecks of Ethereum in terms of fees and scalability by providing scalability solutions for public chains such as Ethereum, weakening the competitiveness of new Layer 1 public chains. Sui needs to further establish its unique position in the public chain market through more differentiated application scenarios and user experience based on its technological advantages.
Diversity of ecological projects and user growth
Currently, Sui's ecological projects are still concentrated in the Meme field. Although these fields are growing rapidly, Sui still lacks a "killer application" with a broad user base. Compared with Solana's iconic DApps such as Raydium and Magic Eden in the last bull market, Sui's ecological projects are still relatively limited in influence and number of users.
In addition, although Sui's technological innovation can attract developers, how to translate it into large-scale user growth remains a challenge. Sui needs more innovative applications and a strong user experience to attract mainstream users, especially in the fields of games, NFT, SocialFi, etc. The lack of a large-scale user base will affect the long-term development of the Sui ecosystem.
Market volatility and ecological stability
Sui's market performance in the early stages has a certain degree of volatility. This volatility makes some investors and users wait and see about Sui's market performance, especially when the token price fluctuates sharply, market confidence is easily affected.
Sui needs to further enhance the stability of the network and the continuity of on-chain activities in the development of the ecosystem to avoid a sharp correction after a short-term outbreak. At the same time, as the unlocking date of Sui tokens approaches, how to deal with the selling pressure and market risks brought about by the unlocking of tokens will also be an important issue that Sui needs to face.
Matching project development with market demand
Sui's technological innovation provides it with a good market starting point, but in reality, the development of ecological projects needs to match market demand. On the one hand, although Sui's developer ecosystem is gradually growing, it still faces challenges in attracting larger-scale application development, especially in the fiercely competitive Layer 1 public chain market. How Sui can seize market demand through its technological advantages and promote more high-quality projects to go online will be the key to its long-term development.
On the other hand, the diversification of user needs also means that Sui ecological projects need to carry out more innovations in different fields. In addition to DeFi and NFT, Sui also needs to strengthen its layout in emerging fields such as GameFi, SocialFi, DePIN, etc., and promote the diversity of ecological projects to better meet the diverse needs of the market.
VI. Outlook for the development of Sui ecology
Sui Ecosystem has attracted wide attention from both inside and outside the crypto industry with its outstanding technical architecture, rapidly expanding project ecology and strong market performance. Looking ahead, whether Sui can gain a foothold in the fiercely competitive blockchain market and become the leader of the next generation of Layer 1 public chains will depend on its development in many aspects.
Continuous optimization and innovation of technology: Sui will continue to advance at the forefront of technological innovation and enhance the resilience and scalability of its network by introducing more efficient consensus mechanisms, cross-chain solutions, and privacy technologies.
Increase the efforts to build the developer ecosystem: Sui can attract more developers to join its ecosystem through more hackathons, developer incentive programs and global developer conferences. Especially in the global developer community, Sui can use its technical advantages to attract more high-quality projects to go online through cooperation and resource support.
Promote the diversification of ecological projects: In addition to the current DeFi and NFT fields, Sui needs to further promote the construction of more innovative projects in other fields, especially in AI, RWA, games, and social networking, to open up new application scenarios.
Enhance user experience and education: Sui needs to provide ordinary users with a more convenient and intuitive user experience, while helping users better understand the performance and cost advantages of the Sui ecosystem through education and community activities. This will help attract more non-technical users into the Sui ecosystem and drive its user growth.
Sui's development prospects are full of opportunities and challenges. With the continuous evolution of technology and the continuous expansion of the ecosystem, Sui is expected to occupy an important position in the future blockchain market and become part of the global blockchain ecosystem. By continuously innovating, optimizing user experience and seizing opportunities in the global market, Sui has the opportunity to become a pioneer leading the next round of blockchain technology revolution.
