SUI dropped over 70% this year, but TVL hit a new high of $2.6 billion: an extreme divergence between on-chain metrics and price

If we are to find a set of contrasting data points for the crypto market in 2026, Sui Network is likely to appear near the top of the candidate list.

As of May 27, 2026, SUI is priced at approximately $1.00, having given back all gains after opening near $1.05 within 24 hours; over the past year, it has declined by as much as 72.51%, far from the all-time high of $5.35 set in January 2025. This week, in the CoinDesk 20 index performance, SUI, with a -2.6% decline, is among the leading losers alongside XRP.

But on-chain data tells a completely different story. According to DefiLlama, the total value locked (TVL) in Sui Network surpassed $2.6 billion in May 2026, hitting a new all-time high, up 37% from a month earlier and approximately 160% from the same period last year; stablecoin transfer volume has exceeded $1 trillion since August 2025; CME officially launched SUI futures contracts, offering standard contracts (50,000 SUI) and micro contracts (5,000 SUI); Grayscale, Canary Capital, and 21Shares launched three SUI spot ETFs in the U.S. market.

The simultaneous appearance of "weakest price" and "strongest ecosystem" on the same blockchain represents a structural divergence worth deeper analysis.

Price Performance Review: From $5.35 to $1.00

According to Gate data, as of May 27, 2026, SUI’s price approached $1.00, opening the week at $1.0584, and briefly rising to about $1.16 around May 22 before giving back all gains. SUI’s current circulating market cap is about $4.2 billion, with a circulating supply of approximately 10k tokens, accounting for roughly 36% of the maximum supply of 10 billion.

From a longer-term perspective, the price decline is even more pronounced:

| Time Period | Price Range | Change (%) | | --- | --- | --- | | Last 7 days | $0.9831—$1.1642 | -6.93% | | Last 30 days | $0.8819—$1.4134 | +7.46% | | Last 90 days | $0.8203—$1.4134 | +7.24% | | Last 1 year | $0.6862—$4.4430 | -72.51% |

Looking at the historical peak, SUI reached a high of $5.35 in January 2025, followed by a sustained valuation correction. This decline is relatively large among mainstream Layer 1 tokens.

In the CoinDesk 20 index this week, SUI, with a -2.6% drop, was among the leading decliners, alongside XRP. Earlier in May, SUI once dropped 4.9% in a single day, ranking as the worst performer among 20 assets. Meanwhile, Cronos performed relatively steadily, indicating that some Layer 1 assets faced similar pressures during the overall market risk-off.

On-Chain Data Breakdown: Ecosystem Expansion Outpaces Price Performance

Contrasting sharply with the price trend, Sui Network’s on-chain data in the first half of 2026 shows accelerated growth.

DeFi TVL hits record highs. According to DefiLlama, Sui’s TVL surpassed $2.6 billion in May 2026, a new all-time high, up 37% from a month earlier and approximately 160% from the same period last year. The top three protocols by TVL are Suilend Protocol (about $745 million), NAVI Protocol (about $723 million), and Cetus, with diversified distribution across lending, trading, and leverage products.

Transaction processing capacity withstands stress tests. In Q1 2026, Sui Network achieved a peak of 164 million transactions in a single day. The total transaction volume in January and February alone exceeded $43 billion, maintaining over 800 TPS throughout the quarter, with finality times under 1 second. Notably, token unlocks worth between $60 million and $78.9 million in January 2026 were smoothly absorbed by the market with minimal price impact, demonstrating resilience under supply shocks.

Stablecoin activity reaches trillions. Mysten Labs co-founder Adeniyi Abiodun disclosed at Consensus 2026 that Sui has processed over $1 trillion in stablecoin transfers since August 2025. On May 21, 2026, Sui officially launched protocol-level zero-fee stablecoin transfer, supporting seven stablecoins including USDsui, SuiUSDe, AUSD, FDUSD, USDB, USDC, and USDY, further reducing friction in on-chain capital flows.

Institutional infrastructure deployment accelerates. In May 2026, CME launched SUI futures contracts, with standard contracts of 50,000 tokens and micro contracts of 5,000 tokens, settled based on CME CF Reference Rates. This makes SUI another Layer 1 asset, after Bitcoin, Ethereum, and Solana, to gain compliant derivatives access via CME. Additionally, Grayscale, Canary Capital, and 21Shares launched SUI spot ETFs in the U.S.

Sui Network’s infrastructure capacity, ecosystem activity, and institutionalization all show significant upward trends in the first half of 2026. Yet, SUI’s price has not followed these developments upward—in fact, it has lost over 70% of its market value over the past year.

Divergence Analysis: Why On-Chain Strength Doesn’t Equal Token Strength

First layer: Dilution effect from increasing circulating supply. SUI’s max supply is fixed at 10 billion tokens; by early 2026, about 36% are in circulation, with the rest gradually unlocking over the coming years. While the fixed cap eliminates long-term inflation, the unlocking pace in the medium term remains a key variable for price. If new supply enters faster than new demand, even with ecosystem expansion, the token price may remain under pressure.

Second layer: Lag in value capture mechanisms. In Sui’s current economic model, network fee revenues are distributed via burning and validator rewards, but SUI holders do not receive direct dividends from network income. In Q1 2026, total protocol revenue was about $58,530, with gross profit around $19,680 after costs. Compared to hundreds of billions of dollars in transaction volume processed, the network’s own captured monetary value remains small. When investors focus more on short-term cash flows than on long-term ecosystem prospects, this "high activity, low income conversion" structure exerts downward pressure on price.

Third layer: Market sentiment and macro risk cycles. The first half of 2026 saw a contraction in risk appetite across the crypto market. During risk-off periods, liquidity tends to withdraw first from "growth-oriented public chains" with expanding supply, rather than from fundamentally sound assets. SUI’s multiple declines in the CoinDesk 20 index reflect this market behavior—assets are being de-risked as risk appetite wanes.

Fourth layer: Emotional impact of ecosystem security incidents. On April 26, 2026, Sui’s lending protocol Scallop suffered a sidechain vulnerability attack, exploiting a side contract related to the sSUI spool reward pool, resulting in a loss of about 150k SUI. While the absolute amount was small, the panic selling triggered by the security breach revealed structural issues in rapid ecosystem growth—when protocol complexity increases, whether security audits and risk controls can keep pace directly influences market confidence.

Conclusion

The divergence between on-chain data and price in Sui Network during the first half of 2026 essentially poses a question about "valuation timing." On-chain expansion indicates that the network’s real usage value is accelerating; price pressure reflects complex market factors including circulation pace, value transmission efficiency, and macro sentiment.

For participants interested in Sui’s ecosystem, the key is not to judge whether the divergence is "reasonable," but to identify preconditions for convergence—such as actual usage data of zero-fee stablecoins, net fund inflows into ETF products, the dynamic balance between token unlocks and market absorption, and whether protocol security can remain robust amid rapid iteration. These signals may not all turn green simultaneously, but together they form the necessary path from "divergence" to "convergence." Until then, the tension between on-chain data and price movements will remain the most critical window for observing Sui’s market narrative.