Sui SUI
What is the SUI network?
SUI is a Layer 1 blockchain designed to resolve issues associated with the Web3 ecosystem. Being Layer 1 means that the blockchain provides the underlying infrastructure for transactions and a system of validations in the same way as Bitcoin or Ethereum networks work.
If you are not familiar with the Web3 concept, we suggest reading this article to learn more: 'What is Web3? Understanding how the decentralised web could replace Web2'.
SUI’s primary focus is based on reducing the latency in the execution of smart contracts and improving blockchain technology by increasing speed and security to help with greater adoption of Web3.
Validators of the SUI blockchain are similar to miners in other blockchain systems. However, SUI’s validation structure provides a parallel system of processing transactions and a consensus engine which is believed by the core team to increase throughput, enhance scalability, and reduce latency. Potential use cases of such parallel-process validation systems include gaming and retail payments.
To make this structure of transaction processing possible, SUI scales horizontally. In other words, there is no upper limit to meet application demand, and the SUI blockchain can maintain low operating costs regarding each transaction.
In July 2023, SUI achieved a significant milestone by surpassing 500 million transactions.
In contrast to more traditional blockchains which typically utilise sequential blocks, SUI enables the organisation of data into independent objects. SUI developers claim that this leads to cheaper and faster transactions.
The SUI network is based on three types of participants – users, validators, and token holders. Each of these categories serves a divergent purpose. For example, users are responsible for submitting transactions to the SUI platform while SUI token holders are in charge of delegating tokens to validators and participating in the governance process.
Why is SUI important for the gaming industry?
SUI stands out as a blockchain uniquely tailored for gaming due to its game-first approach, prioritising player experience, engagement, and agency. Its object-based structure sets SUI apart, designed to handle numerous small NFT assets efficiently while allowing developers the flexibility to modify these items.
SUI is often mentioned in relation to gaming; it stands out as a blockchain tailored for gaming due to a game-first approach, agency and prioritising player experience.
To find out more about NFT games, why not read this article: 'The resurrection of NFT games'.
One of its standout characteristics is the concept of dynamic NFTs within the gaming environment that empower developers to alter the metadata of in-game assets without reissuing or burning them. In simple terms, a game can evolve and carry a significant part of the gaming history as players progress.
This is important for the gaming community since dynamic abilities open up a new world of possibilities. SUI's developers announced the introduction of new data sets to in-game assets that reflect milestones and achievements. For example, a weapon can showcase the battles it has been a part of. Therefore, SUI is claimed to play a significant role in enhancing gaming experience and digital asset ownership.
A brief history of the SUI blockchain
The SUI platform has been created by Mysten Labs whose broad team is led by five founders – Evan Cheng, Sam Blackshear, Adeniyi Abiodun, George Danezis and Kostas Chalkias. All founders are former senior executives for Meta’s digital wallet program known as Novi.
Back in August 2022, SUI launched its testnet. In September 2022, Mysten Labs managed to raise a $300 million investment in a Series B funding round for the development of the SUI blockchain. The company acquired backing from popular venture capital companies such as Circle, Lightspeed Venture Partners, NCSoft, and Binance Labs.
The mainnet went live at the beginning of May 2023. At the launch, the SUI Foundation announced partnerships with centralised exchanges (CEXs) such as Bybit, OKX, and Kucoin to sell SUI tokens to their Discord community and exchange users.
What is the SUI Foundation?
As claimed by the core team, the SUI Foundation presents an independent organisation dedicated to the advancement and adoption of the network. The Foundation laid down a list of their main missions such as educating, funding and promoting builders and creators within the SUI ecosystem.
In October 2023, the SUI Foundation allocated over $1 million to 17 new projects.
The Foundation started with programs associated with acquiring tokens such as the SUI Token Community Access Program. However, SUI’s Developer Grant Program seems to be quite popular on the Internet; SUI aims to find developers to create and enhance the ecosystem. The Developer Grant Program is about granting cash to developers to aid in speeding up the adoption of Web3 through SUI.
What is the SUI ecosystem made of?
The SUI ecosystem is stated to be one the most developed ecosystems within the current crypto environment. Suiscan, SUI’S native explorer, was launched in August 2022. Similar to Bitcoin or Ethereum, the SUI explorer presents a transparency tool with several divergent functions such as auditing and maintaining accurate on-chain data.
Secondly, the SUI Wallet is an open-source extension. The developer team claims it has a user-friendly interface that enables the storage and management of all crypto assets in one place. The SUI Wallet is able to interact with various decentralised applications (Dapps).
One of SUI’s main parts is a storage fund designed to redistribute gas fees to validators. The system was built to ensure that the outflows would always be smaller than the inflows. It encompasses two divergent categories of inflows – storage fees for transactions conducted in 24 hours and reinvestments of the staked rewards that haven’t been distributed to validators.
Are there any drawbacks?
Even though the SUI ecosystem seems to be thriving, it has some drawbacks that need to be dealt with.
The first criticism is associated with a low developer adoption of the SUI Move language. For example, the Ethereum network thrives because many developers can use Solidity and Viper. The same can be applied to Polkadot and Solana where a bunch of developers are familiar with the Rust language.
On the other hand, the Move smart programming language is relatively new; this presents a problem since only a small number of developers can write Move immutable package objects or properly engage in smart contract development.
Although it is considered as a developed ecosystem, SUI has a problem with general user adoption. This is nothing unusual since it is a new blockchain, and it needs some time to ensure security.
Allegations of supply manipulation
Recently, the SUI platform was accused by the South Korean authorities claiming that the developers lied about several aspects of the SUI token. During the Government Affairs Committee audit, the South Korean regulator claimed that the drop in the token’s price could be attributed to the company’s failed claims regarding the circulating supply.
The regulator claims that the freefall of the SUI coin in the last five months happened because the core team lied about the amount in circulation; The SUI Foundation as the issuer received self-interest by staking the locked-up amount and selling it to increase circulation. The regulator blamed the SUI Foundation for prioritising personal gain.
On the other hand, the South Korean Digital Asset Exchange Alliance (DAXA) was criticised for intentionally neglecting to verify SUI’s circulating supply, and not taking action against the issuer.
The SUI Foundation stated that the statements made by authorities were unfounded and materially inaccurate. The issuer claimed that it has not engaged in any liquidation of tokens, including those received as rewards for staking.
How does the SUI blockchain work?
The SUI network provides various features common to other blockchain platforms such as Dapps’ development, smart contract processing, token issuance, and transaction settlement.
SUI introduces several architectural designs to increase the blockchain's speed and scalability. The SUI blockchain encompasses three vital elements that work together to enable a low-cost process of rapid transaction settlements. Let’s check them out.
Move language
SUI utilises the Move programming language to execute smart contracts; it represents an updated version of the Move language typically used by Aptos. SUI's native programming language was originally designed by Meta for its blockchain program.
The Move language refers to an executable bytecode language created to prevent the double-spending issue and improve certain flows of existing programming languages such as Solidity.
Sui’s smart contracts are designed around programmable objects. This makes SUI’s Move stand out because traditional blockchains design their smart contracts around accounts. Objects can be either mutable or immutable along with the option to be shared among multiple users or owned by a single user.
Objects owned by one person won’t have to undergo the whole verification process, enabling them to have instant transaction finality.
Delegated Proof-of-Stake consensus engine
SUI is optimised for simple transactions; the network’s capability to scale is directly related to how consensus is reached for each type of object. For example, owned objects don’t need to reach a consensus for transactions to finalise. Instead, they utilise specific algorithms that grant immediate approval.
To achieve consensus, SUI uses a Proof-of-Stake (PoS) consensus engine known as Delegated Proof-of-Stake (DPoS). Within the DPoS system, there is a fixed set of validators who process transactions within 24 hours. SUI holders select a set of validators based on their share of the total stake.
In exchange for securing the network, validators receive staking rewards in SUI tokens. The platform distributes the rewards to all SUI holders that are delegated to the validators’ stake after taking a small commission fee for the validator.
SUI's DPoS consensus mechanism enables validators to stake SUI, the network's native crypto tokens, to validate transactions. Additionally, SUI ties the platform together by being used to execute custom programs, assuming the role of a medium of exchange and incentivizing users to support its development.
Parallel transaction execution
SUI’s parallel transaction execution is used to increase scalability. Most blockchain networks execute transactions sequentially which means one by one. SUI blockchain executes transactions in a parallel manner which enables it to maintain a broad number of transactions per second.
The parallel transaction execution system differentiates between simple and complex transactions. When it comes to simple transactions such as sending tokens from one account to another, a transaction can bypass the consensus mechanism and process instantly.
For complex transactions, SUI utilises Narwhal and Bullshark. Narwhal refers to a directed acyclic graph (DAG)-based mempool which decouples transactions from the Bullshark consensus engine and makes sure that pending transactions needing consensus are rapidly identified. This helps the SUI consensus engine to read the data properly.
What is the SUI token?
SUI is the native token of the SUI ecosystem. It is used to operate, and maintain the network such as pay transaction fees, execute on-chain transactions, and as a reward to validators for securing the network. SUI holders also obtain the opportunity to contribute to the project’s governance.
Owning and staking SUI coins leads to the opportunity to vote on network upgrades; each vote is proportional to the number of staked tokens. SUI token holders who delegate their tokens to validators are also rewarded.
SUI's tokenomics
The total supply of SUI tokens equals 10 billion. A share of the total supply was released and the launch and the rest of the supply shall be released over the coming years or distributed as stake rewards in the future.
MystenLabs has allocated the tokens to early contributors, investors, and the treasury, along with the Community Access Program and SUI app testers. The other 50% of the supply belongs to a community reserve managed by the Foundation.
As mentioned above in the test, three sets of participants form the SUI economy – blockchain users, token holders, and validators. SUI encompasses a storage fund used to shift staking rewards and compensating future validators.
The future ahead
Looking from a technical point of view, SUI presents a Layer 1 solution with a thoroughly outlined architecture and tokenomics. However, it is considered that this blockchain still has a long way to go due to problems with adoption and transactional speed.
SUI has the potential to enhance the outlook of Web3 and NFT gaming, along with other potential use cases. On the other hand, it is still too early to predict if SUI is a good investment although many industry experts maintain a positive outlook on the SUI blockchain project due to some of its unique features.