Can Sui Network Inject New Vitality into the Current Market? - CR Capital

Similar to Aptos, which has already launched its mainnet, Sui is a new public chain in the Meta family, and was born with a halo, not to mention the backing of various capital. Aptos has a total financing amount of 350 million USD, while Sui has a total financing amount of 336 million USD. Both companies have a valuation of 2 billion USD, with well-known institutions such as A16Z, Coinbase Venture, Jump Crypto, and Binance Labs among their investment entities.

Although both were born at the same time, Sui seems to be taking a more stable path compared to Aptos. From the completion of Mysten Labs' series A financing to the upcoming launch of the mainnet, it has been about 17 months, during which three rounds of testnets were released. This cautious approach towards the launch of the mainnet is partly due to the fact that although Sui and Aptos belong to the Move language family, their underlying technologies are not entirely the same. Sui is more focused on improving the underlying technology.

Underlying Technology

Move language

First, in terms of using the Move language, Aptos directly uses the original version of Move from Meta, while Sui has improved it by introducing the Sui-Move language. Besides inheriting the security and flexibility of the Move language, it uses an object-oriented programming method, making the programming experience more user-friendly.

Consensus

Secondly, in terms of consensus mechanism, although Aptos and Sui both use the BFT (Byzantine Fault Tolerance) consensus mechanism, Aptos uses an improved version of HotStuff, while Sui uses a memory pool based on Narwhal DAG and an efficient BFT consensus mechanism based on Bullshark. Narwhal facilitates transaction propagation with high throughput and scalability, while Bullshark enables zero-message overhead consensus, to a certain extent improving scalability.

Token economics

Unlike the typical POS public chain tokens, Sui has also made innovations in its token economics:

First, Sui has set up a storage fund that can transfer staking rewards across time, meaning that it can compensate later validators with part of the rewards collected from earlier validators. This is mainly due to the consideration that as time goes by, the stored ledger of the blockchain becomes larger and larger, and later validators require higher storage costs.

Secondly, Sui has a unique gas pricing mechanism. At the beginning of each epoch, validators need to declare the minimum gas price they are willing to process transactions. The protocol sorts these quotes and selects the top 2/3 as the reference price, thereby achieving network consensus on the initial reference price. This mechanism can provide users with predictable low transaction fees, avoid unnecessary gas wars caused by opacity, and incentivize validators to optimize their transaction handling operations, as well as prevent Dos (denial of service) attacks.

Therefore, from a technical perspective, Sui is slightly better than Aptos.

Ecosystem

As Sui's mainnet has not yet launched, let's first refer to Aptos' situation. According to DefiLlama's data, Aptos has a TVL of only 59.53 million, and its market cap/TVL ratio is 31.96.

In terms of dex trading volume, Aptos only ranks 40th.

It can be seen that the ecosystem competitiveness of the Move-based public chains is still relatively weak, but it does not prevent the market from giving them more favor.

After the launch of the Aptos mainnet, it has successively announced cooperation with LayerZero, Google Cloud, MoonPay, Npixel (a top Korean game studio), Wormhole, etc. Aptos has also caused a wave of enthusiasm due to its deepening into the Korean market.

Although Sui has not yet launched its mainnet, it has also announced cooperation with Aliyun and Tencent Cloud, and has set its public sale exchanges on OKX, Kucoin, and Bybit, which shows Sui's attention to the Greater China market.

Sui, Aptos, and Linera, the three Meta-based public chains, have founders who were the main founders and core developers of Diem and Novi, the encryption projects of Meta. Since they have been working in the Web2 industry for many years, their ability to acquire resources in the Web2 industry is strong, which may lead to future cooperation with other Web2 companies.

Currently, there is no explosive application in Aptos' ecosystem projects, but there are many homogenous projects. Since Sui's development process is long, its overall ecosystem construction is lagging behind Aptos, and it is not yet known whether it will see explosive applications in the future. Currently, Sui is gradually building its ecosystem through the support program of the foundation. Since the beginning of this year, two rounds of sponsorship programs have been launched, as follows:

The first round of projects that received sponsorship

Dappium: helps developers who do not understand blockchain technology to convert existing games into web3 games by providing APIs and web2 SDKs.
Dapp Low Code Dev Platform: a low-code development platform that provides a simple Web IDE to enable developers to efficiently develop Dapps similar to developing traditional applications.
Go Sui SDK: a Go language development tool for ComingChat, a social application on SUI.
Movey: a registry for Move language packages that Move developers can use to discover, verify, and collaborate on Move language packages.
Remix IDE Plugin: a plugin for writing Sui smart contracts.
Sui Move Analyzer: a plugin that supports the Move language and is built on MoveBit.
Keepsake: an NFT market ecosystem. Currently, Keepsake has partnered with SUI domain service SuiNS.
AirPay: combines on-chain assets and activities with local fiat currencies. AirPay issues debit cards to Sui token holders and directly converts tokens into fiat currencies, supporting offline payments.
Suia: the first POAP application on Sui.
All.Art: a metaverse application in the art and culture field that provides virtual reality display opportunities for artists, galleries, museums, collectors, educational institutions, and companies. Its open-source Unity-Sui wallet allows seamless transactions between users and artists for NFTs.
Mamoru: a security detection solution that can detect the security of blockchain activities and operations in real-time. It provides automated security smart contract operations for applications built on Sui and can monitor and respond in real-time to vulnerability exploitation on smart contracts.
Scallop: an advanced bond protocol originally on Solana, which maximizes potential yields without losing principal. It has now expanded to Aptos and Sui chains. Scallop calls the verifiable random function on the chain every day and selects a winner to receive all profits from each liquidity pool. Other profits are kept in the Scallop treasury and governed by the community.

The second round of projects that received sponsorship

MoveFuzz: a bytecode-level fuzz testing tool for deploying Move smart contracts on Sui.
ChainIDE: a blockchain development assistant tool that provides development environments and tutorials as a web-end service platform.
Onekey: an open-source hardware and software wallet.
Momentum Safe (MSafe): a multi-signature, non-custodial intelligent contract wallet based on Move that can manage team assets, accounting services, DAO tools, etc. Developers can integrate MSafe with any DApp on the Move network.
Cetus: a DEX and centralized liquidity protocol dedicated to the Move family of blockchain. Its core innovation allows for the concentration of liquidity. Users can add liquidity within a customizable price range. Cetus is characterized by its permissionless, programmable, composable, and sustainable features.
Noot Standard: Capsule's Noot Standard is an open-source collection of on-chain modules that create, destroy, store, transfer, modify, and sell a new form of NFT Noots. It provides a framework for artists and game studios to establish digital assets and markets on Sui.
Carbon: a free and open-source Web3 browser that blocks online ads and trackers, and provides privacy protection through built-in dVPN, firewall, and ToR e2ee.
Movernance: a full-featured on-chain governance platform for the Sui ecosystem. It integrates governance forums and on-chain voting functions, and proposes an authoritative governance framework and governance power market that supports Token and NFT governance.

It can be seen that most of the projects in Sui's funding plan are development tools projects, and many of them are aimed at traditional web2 developers. Sui's strategy should be to attract more traditional web2 developers by lowering the development threshold. Although Move language has technical advantages, learning costs have become a hurdle for existing projects to enter its ecosystem. Therefore, Move language may be more attractive to traditional web2 developers.

Looking back at the popular applications that brought traffic to major public chains, due to capturing the windows of opportunity during the defi summer and gamefi summer, Binance Smart Chain has defi applications such as PancakeSwap and Venus, as well as game applications such as RACA and BinaryX. Polygon mainly relied on high-quality applications that migrated from Ethereum, with defi migration applications such as AAVE and Curve, as well as native projects such as QuickSwap, and game applications such as Aavegotchi and Sunflower Land. Solana also seized the NFT trend, with defi projects such as Marinade Finance and Raydium, and popular Move to Earn applications such as StepN and NFTs such as Okay Bear. Avalanche's subnet technology is suitable for developing game projects, and popular games such as Crabada have brought increments to its ecosystem. Among the L2 projects, Arbitrum became the traffic king of L2 due to derivative projects like GMX, cross-chain lending platform Radiant, and the phenomenal game The Beacon in the TreasureDAO ecosystem.

It can be seen that stepping on the trend and providing high-quality applications are the traffic codes for public chains. At present, the defi and gamefi trends have passed, and the next trend needs to wait for the next bull market. Applications with high innovation or dissemination effects are more effective for attracting traffic to public chains at this stage. Therefore, in the Sui ecosystem, we can focus on innovative applications and game applications, as the Move language is still in the early stage of popularization, and explosive applications may still take time. However, from the current ecosystem projects, we can find some original projects with innovation or capital support, and we can pay attention to their landing situation after the mainnet launch.

Potential projects

In addition to Sui's sponsored projects, there are also some potential projects, such as:

DOLA Protocol: DOLA Protocol is a decentralized fully-chain liquidity aggregation protocol built on top of OmniBTC, with the Sui chain serving as the settlement center. OmniBTC is a decentralized fully-chain financial platform that runs on top of Wormhole, LayerZero, and Chainx. The protocol has not yet launched its own tokens, and it can also interact with the currently high-yielding LayerZero.
ComingChat: ComingChat is a Web3.0 application that supports the entire blockchain ecosystem, combining encrypted communication, social networking, wallets, NFTs, decentralized digital identity, blockchain exchange, and Bitcoin lending. Each user will have a unique CID (coming ID) stored as an NFT on the MiniX Open Alliance Chain.
Abyss World: Abyss World is an open-world ARPG game that has gained some popularity in the traditional gaming community. Developer Metagame Industries has said that the team has been developing the game for almost three years and has just completed the construction of its core battle system and system infrastructure. The game has received support from major players such as AMD, EPIC GAMES, and Microsoft, and it plans to use OpenAI services to improve gameplay. The game is set to launch in the third quarter for testing.
SuiPad: SuiPad is a launchpad project for the Sui ecosystem, which recently completed a $115,500 investment round. The platform is currently offering its token $SUIP for IDO on the SuiPad Launchpad and DAO Maker Launchpad.
Turbos Finance: Turbos Finance is a highly efficient decentralized cryptocurrency market built on top of Sui, which combines the liquidity of centralized market makers and the central limit order book service provided by the Sui Foundation. The platform has received support from Jump and Mysten Labs.

In addition, some applications may choose to migrate from Aptos to Sui, as they both belong to the Move language system. Therefore, you can also pay attention to the relatively mature ecosystem projects on Aptos, such as BlueMove and Solana.

$SUI price prediction

Since Aptos can serve as an anchor for valuation, evaluating the value of $SUI is relatively easy. The key difference lies in whether the market prefers to value $SUI based on its circulating market capitalization or fully diluted market capitalization. This depends on market conditions and investor preferences.

The total issuance of $SUI is10b. If we benchmark $SUI based on fully diluted market capitalization, its fair price would be around 1U.

However, if we benchmark based on the circulating market capitalization, we would need to estimate the initial circulating supply of $SUI since it has not been officially disclosed. According to SUI's token distribution, 6% is reserved for early adopters and testers, which constitutes the main circulating supply. Among them, 144 million $SUI were given to early users at a subscription price of 0.03U with immediate unlocking, 450 million were sold publicly at 0.1U, and 34 million, which represent 1/13 of the total, were immediately unlocked. Thus, assuming there are no other supply channels, the best-case initial circulating supply would be only 178 million $SUI.

Aptos had an initial circulating supply of 130 million when it launched, with a market capitalization of around 1 billion. Using this figure as a benchmark, the price of $SUI tokens would be around 5.6U. However, the official initial circulating supply has not been disclosed, and most of the tokens sold publicly after 1.3U would have a demand for a return of investment. Therefore, it may be difficult to reach 5.6U. It is necessary to pay attention to the official announcement of the initial circulating supply for a more accurate estimation.

In summary, the current valuation of the Move ecosystem may not be cheap as Move language's technical advantages and the birth of Meta ecosystem grants them greater imagination space in the market. However, Ethereum's various Layer2 solutions have squeezed out a significant portion of the market share of public chains. Additionally, with the rise of modular public chains, there is not much time left for the Move family. The current challenge that Sui faces is how to leverage its competitive advantages and create high-heat ecological products. All we can do is to continue paying attention and look forward to the emergence of high-quality projects on Sui.