Sui, a decentralized layer 1 blockchain that offers an innovative approach to achieving the balance between decentralization, scalability, and security within its network. Utilizing a delegated proof-of-stake consensus mechanism, Sui aims to address the challenges posed by the well-known blockchain trilemma. The platform is known for its unique combination of the Move programming language and parallel transaction execution, leading to faster transaction processing capabilities compared to its competitors.
The growing Sui ecosystem features a diverse range of decentralized applications (dApps) spanning various sectors, including non-fungible tokens (NFTs), decentralized finance (DeFi), and GameFi. By exploring how Sui manages to maintain the critical aspects of decentralization, scalability, and security, we can gain a deeper understanding of this layer 1 blockchain's potential in the world of decentralized networks.
What is SUI?
SUI Blockchain is a Layer 1 decentralized platform offering remarkable transaction speeds at an affordable cost. As a permissionless network, it supports a wide variety of applications. As a Layer 1 blockchain, SUI serves as the foundation for a system of validations and transactions, comparable to those found in Ethereum or Bitcoin networks.
What sets SUI apart from other Layer 1 blockchains is its emphasis on instant transaction finality, reduced latency, and improved transaction velocity. SUI effectively enhances its scalability without sacrificing security by combining the Move programming language, parallel transaction processing, and a delegated proof-of-stake consensus mechanism.
In essence, the SUI blockchain facilitates rapid, private, and secure digital asset ownership that is accessible to all.
The History of SUI
The SUI blockchain launched it’s testnet in August 2022, which eventually led to the mainnet launch on May 3, 2023. This innovative blockchain was created by Mysten Labs, an impressive team comprising former senior executives from Meta's discontinued digital wallet program, Novi.
To fund the development of the blockchain, Mysten Labs secured a noteworthy $300 million investment through a Series B funding round in September 2022. The company has the support of well-known venture capitalists such as Circle, Binance Labs, Lightspeed Venture Partners, a16z, and NCSoft.
The Sui Foundation, a separate organization, plays a crucial role in promoting the SUI ecosystem and supporting community projects. Aiming to bring the next billion users to web3, the foundation focuses on advancing global adoption of the Sui blockchain.
During the launch, the Sui Foundation collaborated with prominent centralized exchanges (CEXs) like Kucoin, OKX, and Bybit to offer tokens for sale to their Discord community and exchange users. Notably, Binance users staked a staggering $4 billion worth of crypto tokens to farm SUI coins.
How Does SUI Work?
SUI's Move Programming Language
The SUI blockchain operates using the Move programming language for executing smart contracts. Move, also utilized by Meta's Diem Blockchain and Aptos, is a versatile language without blockchain-specific concepts like accounts, transactions, time, and cryptography. Instead of monitoring changes in users' wallets, SUI tracks token movement within its system, enabling various transaction types. The Move Prover mechanism further helps developers verify the legitimacy of smart contracts and blockchain applications.
Delegated Proof-of-Stake Consensus Method (DPoS)
SUI employs a Delegated Proof-of-Stake (DPoS) consensus mechanism, wherein validators process transactions in each 24-hour epoch. SUI holders choose validators based on the proportion of total staked tokens, receiving staking rewards in SUI coins. Participating coins are locked for an epoch, after which token holders can withdraw or change delegated validators.
Although it has only 100 validators, which may result in centralization and vulnerability to attacks, SUI compensates by running 2,000 full nodes to improve decentralization.
Implementing Parallel Transaction Execution
SUI enhances scalability by executing transactions in parallel, enabling a high throughput of up to 120,000 transactions per second (TPS). Transactions are classified into simple and complex categories, with simple transactions processing quickly by bypassing the consensus protocol.
For complex transactions, SUI utilizes the Narwhal and Bullshark mechanisms. Narwhal, a directed acyclic graph (DAG)-based mempool, separates transactions from the Bullshark consensus engine, promptly identifying pending transactions for consensus processing. Additionally, Bullshark allows slow validators to contribute to the specific ordering of transactions.
SUI Token
SUI Coin serves as the native currency for the SUI Blockchain. SUI tokens can be used to pay gas fees, conduct on-chain transactions, and secure the network through staking. In addition, token holders have the opportunity to participate in the project's governance.
Out of the total 10 billion SUI tokens, only about 528 million (5.28%) are currently in circulation. The Sui Foundation holds a significant 50% share of the overall supply. This portion is utilized for various purposes, including delegation programs, grant initiatives, research and development, and validator subsidies. Additionally, 10% of the supply is reserved for Mysten Labs Treasury, while 20% is allocated to early contributors. Lastly, 14% of the tokens are sold for fundraising, and 6% go towards a Community Access Program.
The SUI Token combines utility, governance, and a well-balanced distribution model, establishing itself as an integral component of the SUI Blockchain ecosystem.
SUI Ecosystem
The SUI blockchain has rapidly gained popularity, with its wallet browser extension surpassing 1 million downloads. The expanding ecosystem features a diverse range of decentralized applications (dApps) being built by developers in various categories.
In the realm of Decentralized Finance (DeFi), Cetus leads as the largest decentralized exchange (DEX) in terms of total value locked (TVL). Other noteworthy DEXs on SUI include Turbos, BaySwap, and AnimeSwap. The network also hosts yield projects, such as Mole, and crypto lending platforms like Scallop.
SUI's potential extends to Non-Fungible Tokens (NFTs), with Wizard Land and Baby Apes Society gaining major support from its community. The advanced capabilities, like real-time updating dynamic NFTs, fueled the NFT craze right after SUI's initiation.
These dynamic NFTs attracted the GameFi community to SUI, featuring games like the competitive card game Final Stardust, the social farming game Cosmocadia, and the free-to-play fighting game Rushdown Revolt.
Beyond NFTs, GameFi, and DeFi, developers are also exploring the SocialFi space with projects such as Read2N, Peeranha, and ComingChat. The SUI ecosystem further encompasses oracles, launchpads, bridges, and domain names, offering a comprehensive landscape for innovation and growth.
