what is sui

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What is Sui (SUI)?

Sui is a cryptocurrency and a blockchain launched in 2023. Five individuals with impressive credentials founded Sui. A delegated proof-of-stake (DPoS) consensus algorithm is at the core of Sui’s technology. In the future, Sui will be focused on enhancing its infrastructure, expanding its developer ecosystem, and fostering adoption in targeted industries such as gaming and decentralized finance (DeFi).

What is Sui (SUI)?

Sui (SUI) is a cryptocurrency and a blockchain launched in 2023. The Sui ecosystem is a next-generation smart contract platform that leverages blockchain technology. The native token of the Sui network is also called Sui. It has the ticker SUI on crypto exchanges.

The Sui token serves multiple purposes within the network, including paying transaction fees, staking, and governance. Users can utilize Sui tokens to participate in the decision-making process regarding the project’s future development.

The table below has basic information about the Sui cryptocurrency:

Category Smart contract platform
Ticker SUI
Circulating supply 0.5 billion SUI
Max supply 10 billion SUI
All-Time High (date) $1.72 (May 3, 2023)
All-Time Low (date) $0.9483 (May 25, 2023)

It is important to note the low circulating supply of the SUI token. It means there will be large token unlocks in the coming years. Follow the Sui token’s live price here: SUI’s price.

Sui is seen as the main rival of Aptos, which is a smart contract platform launched in 2022. Both Sui and Aptos have roots in Facebook’s Libra project and have secured hundreds of millions of dollars of funding from the most prominent VCs.

Regarding competition, Sui also faces challenges from various other blockchain projects. Ethereum is a major competitor known for its smart contract capabilities and established ecosystem. With its high throughput and growing popularity, Solana poses a challenge.

The word “sui” means water in the Japanese language.

The History of Sui

Five individuals with impressive credentials founded Sui. The founding team is as follows: Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Denáxis, and Costas Hulkias. Evan Cheng is the public face of the project.

All five founders previously worked at Novi Financial, a company focused on building products for Facebook’s Libra project. However, Libra faced significant regulatory challenges, leading to rebranding efforts and subsequent shutdown. The project (known as Diem then) was officially shut down in 2022.

Recognizing the impending obstacles of Libra (Diem), Sui’s founders established a software company, Mysten Labs, in September 2021. Mysten Labs became the driving force behind Sui’s development.

Funding for Sui was secured through multiple rounds of investment from prominent players in the crypto industry. In December 2021, Mysten Labs raised $36 million from Andreessen Horowitz and an additional $300 million from various crypto venture capital firms. Notable investors included FTX, Binance Labs, Coinbase, and Circle.

The Sui blockchain went live on May 3rd, 2023, following a year of extensive testing. This expedited launch can be attributed to the groundwork laid during the Libra/Diem era, where substantial progress had already been made. With the blockchain’s introduction, Sui quickly garnered attention and gained listings on top cryptocurrency exchanges.

Sui’s association with Facebook’s Libra (now Meta) significantly influences its trajectory. The project’s founders, having witnessed the challenges faced by Libra, sought to continue their crypto journey independently. Sui emerged as a continuation of the vision that started with Libra, adapting to the evolving landscape and regulatory requirements.

The technology behind Sui

A delegated proof-of-stake (DPoS) consensus algorithm is at the core of Sui’s technology. This consensus mechanism enables the Sui blockchain to process 300,000 transactions per second. While the initial throughput is limited, the blockchain’s design allows for scalability and increased transaction speeds over time.

The downside of the DPoS consensus is centralization. There are only a hundred validators, which are also hand-picked by the Sui Foundation. Sui Foundation is the organization that guides the development of Sui. Read more about different consensus mechanisms from our in-depth guide: Cryptocurrency consensus algorithms explained.

Unlike many other smart contract platforms, which are account-based, Sui operates on an object-oriented model. The object-oriented model means that instead of interacting with a smart contract for every transaction, users can directly move objects like tokens or non-fungible tokens (NFTs). This approach reduces transaction fees and enhances transaction speeds, providing a more efficient user experience.

To support its object-oriented design, Sui utilizes the Move programming language. The Libra project originally developed the Move language. Sui’s modified version of Move incorporates object orientation into the programming language. Sui Move enables developers to create and interact with objects on the blockchain more seamlessly.

The choice of Move as the programming brings several advantages. Move is based on the Rust programming language, renowned for its robustness and security. It makes the transition from Rust to Move fairly simple for the developers.

You can learn more about the Move programming language from Sui’s official documentation.

The Tokenomics of Sui

The Sui token serves as the native currency of the Sui blockchain, playing a crucial role in the ecosystem. In this chapter, we will delve into the tokenomics of Sui, including its distribution, staking rewards, and future token unlocks.

Sui has a maximum supply of 10 billion tokens. The initial distribution of tokens was allocated as follows: 20% to early contributors, 14% to investors, 10% to Mysten Labs, 6% to community testers, and 50% to the Sui Foundation. The Sui Foundation also reserves 10% of its allocation for additional staking rewards, incentivizing validators.

Staking rewards are an essential aspect of the Sui token ecosystem. Currently, both validators and delegators can earn staking rewards, which are approximately around 8%. Validators are required to stake a minimum of 30 million Sui tokens in their pool to participate. On the other hand, delegation can be done with no minimum stake, providing flexibility for users who want to participate in staking.

An important aspect of Sui’s tokenomics is the storage reward structure. Like projects like Arweave, Sui allocates a portion of transaction fees to a storage fund. Validators are compensated for storing past transactions, and the additional staking rewards are distributed as needed. This approach encourages validators to contribute to the network’s storage capacity and ensures the availability and integrity of historical data.

The picture below describes the Sui token economy. Source: The Medium blog of Sui.

sui tokenomics

Looking ahead, it’s essential to consider the future token unlocks of Sui. There will be significant token unlocks in the coming years. These unlocks may increase selling pressure on the market, considering that early investors and crypto VC firms acquired Sui at relatively low prices.

It’s worth noting that while the token unlocks may create short-term volatility, they also offer opportunities for new investors to enter the market. Sui’s overall success and price performance will depend on various factors, including adoption, market conditions, and the project’s ability to deliver on its milestones.

The Future of Sui

In the future, Sui will be focused on enhancing its infrastructure, expanding its developer ecosystem, and fostering adoption in targeted industries such as gaming and decentralized finance (DeFi). Updates and improvements to the Sui blockchain, including enhancements to the move programming language and storage capabilities, are expected to be part of the roadmap.

We must remember that the smart contract platform market is highly competitive, with established players like Ethereum, Solana, and Polkadot. Sui faces the challenge of differentiating itself and carving out a niche.

However, its unique features, such as object orientation and high transaction throughput, could position it as a viable alternative for developers seeking scalability and efficiency. Sui’s focus on blockchain gaming and partnerships with industry giants like Alibaba also provides opportunities for growth and adoption.

Token unlocks may impact the market price of Sui. Large quantities of unlocked tokens hitting the market can create selling pressure, potentially leading to short-term price volatility. This could discourage some investors and traders.

Sui’s substantial funding, including investments from prominent crypto venture capital firms and partnerships with institutions like BitGo, provides a solid financial foundation for the project. This funding enables the Sui team to execute their roadmap, support ongoing development efforts, and drive adoption.

Are you interested in investing in Sui? Read more from our beginner’s guide: how to buy Sui. It gives you step-by-step instructions on how to buy and store Sui safely.


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