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Today marks the beginning of our series delving into the Sui blockchain, that's already creating waves and grabbing the attention of web3 enthusiasts!
Key Points
- Sui is a Layer 1 object-oriented blockchain created by ex-Meta developers
- Sui Move programming language
- Built-in ZK architecture and OpenID for logins
- Parallel Transaction Processing
- Horizontal scaling without limitations
- Storage Fund
In the dynamic world of blockchain technology, Sui emerges as a game-changer. Developed by Mysten Labs, Sui positions itself as an exceptionally scalable Layer 1 blockchain and smart-contract platform, ready to make a lasting impact.
Similar to other blockchain projects, Sui aims to address fundamental industry challenges by focusing on scalability, secure programming, and mass adoption. Its innovative object-oriented architecture, proprietary Sui Move programming language, and integration of ZK proof technologies formed the basis of a platform designed to overcome all barriers with a guarantee of security for all Web3 contributors.
Behind the scenes
In June 2019, Meta, formerly known as Facebook, revealed its vision for a global payment network through the integration of blockchain technology and a digital wallet. The Diem Association and Novi Finance were established to spearhead these initiatives.
However, both projects encountered significant challenges. Diem succumbed to regulatory hurdles, leading to its closure in January 2022, while Meta later terminated the Novi project without providing a clear explanation.
In the aftermath of these setbacks, two distinct blockchains emerged: Aptos, carrying forward Diem's legacy, and Sui, a groundbreaking creation by Mysten Labs, born from the remnants of Diem.
The project name Sui, (swē in English), comes from the Japanese word for "water". The reference to the water element is reflected in the identity of the blockchain - the tokens are called SUI and MIST - as well as in the visual component of its branding.
The Sui mainnet went live on May 3, 2023, following the launch of devnet and several network tests. The launch represents a significant milestone for the blockchain protocol and coincided with the launch of its own token, SIU, on the Binance exchange.
The company behind Sui, Mysten Labs, was founded in 2021 and headquartered in Palo Alto, California. The project team has five co-founders with incredible experience from the past. Among them, Evan Cheng, Adeniyi Abiodun, Sam Blackshear and George Danezis were all former executives and leads in the Meta's Novi project.
In the realm of fundraising, Mysten Labs has successfully raised $336 million across two funding rounds since December 2021. Noteworthy contributors include Binance Labs, a16z crypto, FTX Ventures, Electric Capital, and traditional financial giants Apollo Global Management and Franklin Templeton.
What Makes SUI Stand Out in the Crypto Crowd
At the core of SUI Blockchain's uniqueness is its object-oriented design, setting it apart from the crowd of other blockchain systems. Instead of grouping transactions into blocks, as most blockchains do, Sui nodes validate transactions individually, which reduces network latency. Because transactions are grouped into objects, validators can process transactions in parallel, allowing for horizontal scaling.
This solution allows many transactions to skip the full consensus cycle, simple transactions bypass the Sui DPOS (Delegated-Proof-of-Stake) consensus protocol by executing instantly, without waiting for the entire set of validators to agree. For more complex transactions, the standard BFT consensus validation process is used.
In this way, Sui takes scalability to a completely new level, with no upper bound and the capability to handle extremely low latency.
With Sui's parallel system, scalability becomes virtually limitless as more validators join the network, each determining the number of transaction lanes based on their machine power. It is noteworthy, that some types of blockchains are heavily tied to software and need to upgrade their core or make soft-forks to achieve better performance.
Beyond that, Sui provides an innovative mechanism, Storage Fund, for solving the storage cost issue that is a headache for many blockchains. It transforms block space into a commodity, allocates fees for perpetual data storage, adjusting validator rewards accordingly.
This ingenious mechanism prevents a negative externality, where current users burden future users with unpaid storage costs. Sui's design promotes responsible data storage, ensuring the network's long-term health.
When it comes to smart contracts, a standout feature in the SUI Blockchain's toolkit is its revolutionary take on smart contracts, powered by the SUI Move Language. Unlike run-of-the-mill smart contract languages, the SUI Move Language puts security front and center. What's more, it brings data composability, empowering developers to handle data packages, including structs, with enhanced ease and flexibility. This opens doors to crafting advanced and secure smart contracts tailored for a diverse range of real-world scenarios.
Equally important part of any project's ecosystem is the pricing of gas for performing transactions. In many cases, impacting the cost of fees is determined by network capacity.
The Sui gas price mechanism has two integral components: the computation gas price and the reference gas price. At the beginning of each epoch, a validator-wide survey establishes the reference gas price. Validators are prompted to adhere to this reference price, driven by a tallying rule and the incentivized stake reward distribution rule.
This incentivization framework fosters a competitive environment, promoting equitable gas prices and fostering alignment of interests among SUI token holders, validators, and users. It ensures a harmonious ecosystem where fair practices are encouraged and benefits are distributed in a manner that propels the well-being of all stakeholders.
To improve the user experience and address the long-standing problem of mass adoption of cryptocurrencies, Sui has introduced a seamless registration process solution - zkLogin.
Private keys have long been a barrier to blockchain adoption, requiring users to save and carefully manage them. zkLogin changes the paradigm by providing secure access to dApps via Web2 credentials, eliminating the need to do so.
Users can now log into Web3 services (Defi, GameFi, DEX) using their trusted social accounts such as Google, Facebook, Apple, and others. This solution allows millions of users to enter the world of decentralized solutions while maintaining the benefits of privacy and ownership within blockchain.
Based on Zero Knowledge Proof technology, zkLogin allows one party to verify the truth of an assertion without revealing unnecessary details. Through a combination of zk-SNARKs and JSON Web Tokens, users are able to confirm their identity without disclosing real login credentials.
Below you will find a comparison table of Sui with other widely used blockchain protocols, allowing you to evaluate the technical aspects of the project.
Limitations of SUI
Low Developer Adoption of Sui Move.
The challenge of low developer adoption for Sui Move stems from the language's novelty. Move, in itself, is a relatively recent addition to the programming language landscape, and the emergence of Sui Move introduces an additional layer of complexity.
General User Adoption
Moving beyond the realm of developers, Sui faces a similarly challenging task of achieving widespread adoption among ordinary users. As with attracting developers, convincing builders and degens to actively choose and work with Sui's blockchain is no easy task.
And the need for speed?
Despite Sui's claims of high throughput, the network is currently operating around 115 tps, with a peak of 1772 in the last 30 days.
This score may also be due to low activity in the ecosystem, as Sui is a young project.
However, based on the tests conducted in May 2023, Sui network with 100 globally distributed validators achieved peak throughput ranging from 10,871 TPS to 297,000 TPS on various workloads with finality time ~480 milliseconds.
Lack of infrastructure projects
Launching a new technology inevitably brings the challenge of constructing the necessary infrastructure for its growth and development. Since the Ethereum ecosystem is the largest and has been around for over seven years, many blockchain projects have already solved this by integrating with the Ethereum Virtual Machine (EVM). This move not only allows other EVM-based blockchains to be supported, but also opens the door for Ethereum-based applications and attracts developers.
Who knows, maybe down the line, Sui might decide to step into the EVM club as well.
Token Economy of SUI
The Sui economic model serves as the cornerstone for aligning the incentives of the various participants involved in the dynamic ecosystem and revolves around three key players: users, SUI token holders, and validators, each of whom plays a key role in the system.
At the core of the Sui blockchain is the Delegated Proof-of-Stake (DPoS) consensus mechanism, which defines the validators responsible for processing transactions. In addition to decentralized decision-making, changes in Sui governance are initiated by voting on the blockchain, which provides a democratic approach to adjusting the protocol.
Importantly, this model is designed to blend seamlessly with Sui's engineering design, creating synergies to ensure the ecosystem operates efficiently. The integration of these elements emphasizes Sui's commitment to creating a balanced and stimulating environment for its participants.
The maximum supply of SUI tokens is capped at 10 billion.
At the time of writing:
- Circulating supply - 1,033,262,463 SUI
- Total supply - 10,000,000,000 SUI
- Max. supply - 10,000,000,000 SUI
Inflation and deflation are terms that regularly come up in the realm of cryptocurrency discussions. Both of these terms are related to how ecosystem participants are incentivized to support the cryptocurrency network. While inflation can motivate miners, deflation has its impact on coin holders. Understanding these concepts helps predict how cryptocurrency will evolve and sustain in the future.
The balance of inflation or deflation in the ecosystem depends on the delicate balance between expanding token supply and network activity. Sui takes a specific approach with a limited token supply and a transparent unlocking schedule to increase predictability. This strategy aims to ensure stability and transparency of market dynamics.
At the time of Mainnet Sui's launch, about 5% of all tokens were in circulation. As shown in the graph, the process of unlocking tokens to maintain the network, follows a set timeline. The project team noted that the schedule could be changed if needed to support the balance of the network.
Native multi-functional SUI token, acts as a powerful incentive mechanism for participants and serves for main roles:
1. Gas fee - every network operation conducted on the platform necessitates gas fees, and these fees serve as rewards for network participants and prevent spam attacks.
2. Staking - Token holders participate in securing the network, being rewarded for participation.
3. Maintaining liquidity on the chain - SUI tokens are utilized by liquidity providers for supporting DeFi protocols.
4. Participation in governance - token holders can participate in voting for future projects or changes to the SUI blockchain.
5. Storage Fund - compensation mechanism for blockchain data storage.
The second token of the Sui network, mentioned before, is MIST which symbolizes the smallest unit of SUI, equivalent to 10^-9 of a SUI. One billion MIST equals one SUI. The tiniest denomination of SUI Coin offers increased flexibility for microtransactions.
Future Steps
Mysten Labs shared with Messari its plans for the latter part of 2023, focusing on enhancing key aspects of Sui like scalability, tokenomics, and Sui Move.
When it comes to scalability, the team aims to enable light client/sparse nodes to conduct sparse replay and scaling up Sui's throughput by having validators use additional machines.
In terms of tokenomics, exploring congestion pricing, where users will be able to add tips to transaction fees, potentially making transactions more expensive, while at the same time it could curb demand spikes for Sui blockspace.
Additionally, Mysten Labs plans to make governance-related improvements to the Storage Fund mechanism, including protocol upgrades with setting the storage gas fee. There were also planned improvements to MEV (Maximal Extractable Value) which enhance the mechanisms for miners or validators to gain profits strategically.
On the Sui Move development side, the team provides tools like Sui Move's Prover which ensures developers that their applications are secure and function correctly for all transaction scenarios. The Improved Language Server is a useful tool for developers, integrating with VSCode to enhance code comprehension and error reporting. The Linting tool keeps the code neat and organized by catching bugs and enforcing a coding style, with a focus on front-end projects. In addition to these, Mysten Labs plans to update and add more tools like auto-formatting, a debugger, and a REPL/language shell to aid developers working on Sui. The REPL allows for quick code testing without the need for a full development environment.
Final Thoughts
The Sui team has confidently entered the industry with strong investor support. Although the novelty of the technology and the new Sui Move language adoption can be a stumbling block, the team is working on minimizing obstacles for future developers by ensuring a smooth onboarding process.
Sui's architecture positions it as an ideal hub for DeFi, gaming, and payment protocols, thriving on straightforward transactions. What's more, Sui's network can scale horizontally on demand, keeping those transaction costs comfortably low. So, in the midst of the bear market blues, Sui emerges as a powerhouse, ready to reshape the landscape for user-friendly, efficient, and scalable blockchain solutions.
The project's success depends largely on meeting expectations and laying a solid foundation for ecosystem growth, ensuring the widespread adoption of blockchain applications. If the cryptocurrency market experiences an unexpected boost, the clamor for a versatile and scalable smart contract platform, embodied by Sui's Web2-style interface, will skyrocket among developers and consumers alike.
