Analysis of Sui Ecosystem Development Status and Token Economic Model

Sui, as one of the representative projects of the Move-based public chain, has been running for more than 40 days since its launch on May 3rd. As a project with a different development path compared to Ethereum L2, Sui has sparked considerable discussion, particularly regarding its Token issuance method and release model. Some believe it may repeat the mistakes of ICP, while others compare it to the emerging public chain projects of 2021.

So, what is the current state of ecological development for Sui? What is the recent situation regarding token releases and demand?

1. On-chain Data Analysis

1. Total Locked Value ( TVL )

As of June 13, Sui’s TVL is $15.22 million, with DEX Cetus accounting for over 60%. Among all public chains and layer-2 networks, Sui’s TVL ranks 54th. It is worth noting that its TVL peak reached $36.01 million, and it has currently dropped by more than 50%.

In contrast, another Move ecosystem project, Aptos, currently has a TVL of $42.11 million, with a historical high close to $65 million, ranking 34th.

2. Trading Volume

The daily trading volume on DEX on Sui peaked on May 10, exceeding $19 million, and has since shown a downward trend. Since June, the daily trading volume has mostly been between $3 million and $6 million, indicating lower trading activity.

3. Network Activity

Since its launch, Sui has recorded a total of 16.53 million transactions, with an average TPS of 3, a total of 850,000 active addresses, and 104 active nodes. The highest TPS recorded on the network was 26, which occurred during the Turbos IDO on May 12.

Compared to Ethereum L2, Sui’s actual TPS is still relatively low.

In terms of daily active addresses, the peak occurred on May 20, reaching 130,000, mainly due to Cetus opening its permissionless pool feature and the meme project airdrop across the network. On a regular basis, the daily active addresses are less than 10,000.

4. Cross-Chain Bridge

Currently, there are three cross-chain bridges supporting Sui: Wormhole, kriya.finance, and WELLDONE, but there is a lack of specific cross-chain amount data.

2. Overview of Ecological Projects

The Sui official website currently lists 66 projects, most of which are still in the testing phase. The projects that have been launched and issued tokens generally perform poorly, with leading DEX projects having dropped below their initial prices and the social platform SUIA experiencing a decline of nearly 81.82%. Relatively better-performing Suipad mainly benefits from its lower IDO pricing.

It is worth noting that due to the limited number of Sui users and funds, some projects like Abyss World have chosen to conduct their IDOs on other networks such as Polygon.

3. Token Release and Demand Analysis

The total supply of Sui Tokens is 10 billion, with an initial circulation of 528 million, accounting for 5.28%. From May to October 2023, there are mainly two types of tokens released for Sui: exchange IEO issued tokens and staking node incentive tokens.

Approximately 34.61 million tokens are released each month in the IEO portion, with 33.30 million tokens released each month for the node staking incentive in the first three months, and 30.00 million tokens released each month from the 4th to the 6th month. In total, the average monthly release in the first three months is 67.94 million tokens (accounting for 0.67% of the total), and the average monthly release from the 4th to the 6th month is 64.61 million tokens (accounting for 0.64% of the total).

In November 2023, a large-scale unlocking is expected, with a daily unlocking amount exceeding 1 billion tokens, which is anticipated to double the circulating token supply.

However, from the demand side, the Sui network currently has low trading activity, with few users, and there is no obvious demand for SUI Token in the short term.

Four, Comparison with Aptos Token Release Model

The total supply of Aptos Tokens (excluding staking incentives) is 1 billion coins, with an initial circulation of 130 million coins, accounting for 13%. In the first year after launch, 4.54 million coins will be released each month (accounting for 0.45% of the total supply). Starting from the second year, the monthly release amount will significantly increase.

Aptos also has node staking incentives, currently releasing approximately 4.9 million tokens per month (accounting for 0.49% of the total supply).

In contrast, Sui had a lower initial circulation, but the average monthly release amount in the first 6 months was higher. Sui’s first large-scale release occurred 6 months after its launch, using a one-time release method; while Aptos began its large-scale release 12 months after its launch, adopting a gradual monthly release strategy.

Overall, Sui faces greater token supply pressure in the first year than Aptos, while Aptos’s supply pressure is mainly concentrated in the second year.

5. Conclusion

Sui is currently in the cold start phase, and both the user base and trading activity need to be improved. The project team is currently more focused on technical development and has not yet launched large-scale user incentive measures.

In the current bear market environment, coupled with the continuous development of Ethereum’s second-layer networks, Sui faces challenges in attracting funds and users. From the perspective of the token economic model, Sui’s token release pressure in the first year is relatively high. In the case of insufficient demand, such a large-scale token supply may lead to significant selling pressure on the SUI token.