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A Full Introduction to Sui’s Tokenomics and Market Statistics

2023-04-28 11:00:00

On May 3, the high-profile public chain project Sui Network launched its mainnet. Similar to Aptos, which sparked heated discussions last year, Sui is also backed by a team and underlying technologies from Diem and Novi, two suspended stablecoin and wallet projects of Facebook (now Meta). However, unlike Aptos, Sui did not issue coins through airdrops but instead opted for whitelist subscriptions for early participants and public offerings.

To help you better understand Sui, we will dive into Sui’s development status, tokenomics, and market statistics.

Sui Network

Development Status

Mysten Labs, the development company behind Sui, appeared in the market in 2021 and was favored by top VCs in an early stage thanks to its Meta background.

Like Aptos, Sui also uses Move, a new Rust-based smart contract language developed by the disbanded project Diem specifically for crypto assets. Compared to Solidity, which is used by Ethereum and EVM public chains, Move enables enhanced security and flexibility through differentiated asset data and transferable modules.

Sui has upgraded Move to Sui Move, which offers better network performance while maintaining the original security performance. In the meantime, Sui also uses the Sui consensus engine composed of Narwhal and Bullshark, enabling a maximum TPS of 120,000 in testing.

After nearly two years of testing and verification, Sui’s technical capacity and overall architecture have gradually stabilized. Right now, there are over a hundred projects built on Sui, mainly including categories such as gaming, NFT, infrastructure, social networking, and DeFi. 

Tokenomics

SUI, the native asset of Sui Network, represents an indispensable part of the Sui ecosystem and offers the following use cases:

  1. Staking and PoS validation;
  2. Paid as gas fees for trading, storage, and other operations on Sui Network;
  3. Used as the multi-functional asset and liquid asset for various applications in the Sui ecosystem;
  4. On-chain voting and governance.

The total SUI supply is capped at 10 billion. According to Sui Foundation’s plan, SUI is distributed as follows:

  • 50% of the supply will go to the Community Reserve managed by Sui Foundation and used to fund the delegation program, grant programs, research and development, and validators subsidies;
  • 20% of the supply will be allocated to early contributors;
  • Investors will get 14% of the supply;
  • 10% of SUI will be channeled into the Mysten Labs Treasury;
  • 6% will be distributed to the Community Access Program and app testers.
SUI Tokenomics

Source: Blog of Sui Foundation

The whitelist subscription and public offering conducted before the mainnet launch are both part of the Community Access Program, which mainly aim to help members of the Sui community obtain tokens in an early stage. Based on the current distribution model, half of the SUI supply is reserved for ecosystem development, investors and the founding team receive 24% of the tokens, and the remaining 26% will go to supporters such as early contributors and early community members. 

That being said, the specific proportion and unlock time of the various programs under Community Reserve have not been officially disclosed.

Market Statistics

Investors often compare Sui’s valuation with that of Aptos. Aptos Labs raised over $350 million in the seed round and Series A funding with over $2 billion in valuation, while Sui raised $336 million during Series A and Series B funding with a valuation of more than $2 billion. The two projects are almost the same in terms of fundraising scale and project valuation.

According to CoinEx, Aptos’ native token APT comes with a circulating market cap of $1.898 billion, a total circulating market cap of $10.117 billion, and a peak total circulating market cap of $18.34 billion.

Aptos’ native token APT price

Source: CoinEx

During the latest offering under the Community Access Program, 144 million SUI was directly sold, and the remaining 450 million SUI will be offered in 13 tranches (7.7% a month). As such, approximately 178.65 million SUI will be unlocked and sold on June 3. According to the sales data from Sui’s partners, the initial circulating supply of SUI is about 480 million. Based on the current circulating market cap of APT, the future price of SUI may approach $4. If we base our valuation of SUI on the full circulating market cap of APT, the future price of SUI would hover around $1 and peak at about $1.83.

Market Statistics: Sui vs Aptos

According to Sui’s testnet explorer, Sui Network’s TPS peaked at 132,125 in the last 30 days, while Aptos’s highest TPS during its initial launch was only 2,107, with a peak TPS of merely 151 in the last 30 days. Although testnet data may differ from mainnet data, Sui’s technical superiority, which is extensively recognized, is obvious.

SUI Network Stats
Aptos Explorer

Source: Sui Explorer, Aptos Explorer

Following its mainnet launch, Aptos’ performance has been controversial, and the public chain has yet to foster popular applications, despite improvements in terms of infrastructure. As Aptos’ sibling, Sui has attracted a large number of projects during the testnet stage, but no hit projects have emerged yet. Now that Sui has launched its mainnet, it will still take a while to confirm whether its technical capabilities can meet the demand of large-scale applications such as gaming and social networking projects as the team claimed. 

Though Aptos has yet to offer successful applications, APT still managed to record a market cap of over $10 billion thanks to the expectation among investors and capital institutions for Move-based public chains. Right now, SUI’s initial circulating supply only takes up a small chunk of its total supply, which will enable price growth in the early stage. That said, the chain has not fully disclosed the unlock time and scale of SUI. Will the market recognize SUI’s value just like APT, let’s wait and see.

SUI is now available on CoinEx (https://www.coinex.com/), a global crypto exchange. Follow and start trading the crypto on CoinEx if you’re interested.

Disclaimer: This article is for reference only and offers no financial advice.

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