What Is SUI Blockchain?
|— Sui is a decentralized layer 1 blockchain that uses a specific type of proof-of-stake consensus named delegated proof-of-stake.
— Sui is a unique blockchain using the Move language and parallel transaction execution, which allows it to process transactions much faster than its competitors.
— The nascent project has a flourishing ecosystem of dApps ranging from NFT and DeFi to GameFi.
A blockchain must strike a balance between being reasonably decentralized and offering a scalable and secure infrastructure. However, these fundamental properties are often at odds with each other, making it difficult for a blockchain network to achieve all three simultaneously.
And that’s what we call a blockchain trilemma!
Decentralization is the central ethos of blockchain technology. However, achieving optimal decentralization decreases network throughput, as the more miners and validators are in the network, the slower the consensus speed.
Scalability, which is the ability to support high transactional throughput, remains the major challenge for today’s leading decentralized networks.
Different blockchains tackle scalability in different ways, such as layer 2 blockchain solutions, sharding, off-chain processing, and consensus algorithm modifications. However, they may introduce security considerations such as smaller sets of trusted blockchain nodes.
Over the years, several blockchains have emerged with their own solution to this blockchain trilemma. Sui is one such layer 1 blockchain, claiming to have solved problems of scalability, security, and decentralization with its technology.
So, how does Sui achieve this? Let’s dive in!
What Is the SUI Blockchain?
Sui is a decentralized layer 1 blockchain that offers great transaction speed at a low cost. This permissionless blockchain is designed to support a wide range of applications.
Being a layer 1 blockchain means Sui provides the underlying infrastructure for a system of validations and transactions, much like the Ethereum or Bitcoin networks. But what sets it apart from other L1s is its focus on instant transaction finality, reduced latency, and increased transaction speed.
In short, Sui aims to increase its scalability without compromising on security by using a combination of the native programming language Move, parallel processing of transactions, and delegated proof-of-stake consensus mechanism.
This way, Sui allows for fast, private, and secure digital asset ownership accessible to everyone.
The History of SUI Blockchain
Sui launched its incentivized testnet in August 2022. Then the mainnet went live on May 3, 2023.
The blockchain is developed by Mysten Labs, which is led by several former senior executives for Meta’s (previously Facebook) now-defunct digital wallet program, Novi.
Mysten Labs raised a $300 million investment in a Series B funding round in September 2022 for the development of the blockchain. The company has the backing of popular venture capitalists, including Circle, Binance Labs, Lightspeed Venture Partners, a16z, and NCSoft.
Meanwhile, the Sui Foundation is an independent organization supporting the community and its projects. Its mission is to onboard the next billion users to web3 by advancing the global adoption of the Sui blockchain.
At the launch, the Sui Foundation partnered with centralized exchanges (CEXs) such as Kucoin, OKX, and Bybit to sell tokens to their Discord community and exchange users. Binance users staked over $4 billion worth of crypto tokens to farm SUI coins.
How Does SUI Blockchain Work?
The Sui blockchain has three core elements that work together to process instant settlements at a low cost: Move language, parallel transaction execution, and the Sui Consensus Engine.
SUI Blockchain’s Language: Move
The Sui network uses the Move programming language to execute smart contracts. The programming language is also used by Meta’s Diem and another layer 1 blockchain, Aptos, which is also founded by former Meta employees.
Move is a cross-platform language without blockchain-specific concepts like accounts, transactions, time, and cryptography. So how does it work?
Well, most blockchains that use smart contracts follow the changes in users’ accounts, aka crypto wallets. Conversely, Sui tracks the movement of objects, aka tokens, instead. It’s these objects’ movement that spurs a transaction. Then, these transactions might be mutable, immutable, or even involving multiple people, since this blockchain doesn’t have the same type of wallet-to-wallet limitations like others.
Finally, the Sui blockchain also uses the Move Prover. In short, this mechanism allows developers to verify that their code executes as intended. Basically, it means you can check the validity of any smart contract or blockchain app.
Delegated Proof-of-Stake Consensus (DPoS)
In Sui’s DPoS system, there is a fixed set of validators who process transactions within each epoch (a period of 24 hours). SUI holders select a set of validators based on their share of the total stake. This is determined by the amount of SUI tokens staked by holders with them.
In exchange for operating and securing the network, the blockchain validator receives staking rewards in SUI coins. The system then distributes the rewards to all coin holders who delegated to that validator’s stake after deducting a small commission fee for the validator.
Staked coins are locked into the system only for a specific epoch. Then token holders can pull out their tokens or change their delegated validator once the epoch changes.
It’s worth noting that the network currently has only 100 validators. This allows for faster transaction processing and higher efficiency. But at the same time, this means it is far more centralized than most other blockchains and is more vulnerable to 51% attack.
But why is that exactly? Put simply, the lower the number of validators, the higher the chance of collusion to control the network and manipulate it to one’s own benefit. To counteract this low validator count, SUI operates using 2,000 full nodes, enhancing network decentralization.
Parallel Transaction Execution
To increase scalability, Sui uses parallel transaction execution. To explain, most blockchains execute transactions sequentially, meaning one by one. Sui blockchain executes transactions in parallel instead. This allows it to process up to 120,000 transactions per second (TPS) compared to Ethereum’s 15 TPS and Solana’s 4k TPS.
Another interesting feature of the chain is how it differentiates transactions into two categories: simple and complex.
For simple transactions, such as sending tokens from one account to another, a transaction may bypass the consensus protocol and process almost instantly. By removing the need for unrelated assets to go through the relatively longer and more expensive consensus process, Sui is able to increase its throughput.
For complex transactions, Sui leverages Narwhal and Bullshark.
To explain, Narwhal is a directed acyclic graph (DAG)-based mempool. It decouples transactions from its consensus engine, Bullshark, and ensures that pending transactions requiring consensus are quickly identified.
Bullshark is for the specific ordering of transactions and allows slower validators to contribute.
So now you know about its inner workings, what about its coin?
What Is SUI Coin?
SUI is the native coin of the Sui blockchain.
On the network, you can use SUI to pay gas fees, execute on-chain transactions, and stake security for the network. Moreover, holders also gain the privilege to contribute to the project’s future governance.
Currently, SUI maintains a maximum supply of 10 billion, but only approximately 528 million tokens (5.28% of supply) circulate in the market.
When it comes to tokenomics, the Sui Foundation controls 50% of the token supply. While this sounds like a lot, the SUI Foundation uses these funds for delegation programs, grant programs, research and development, and validator subsidies. Then, a further 10% is allocated to Mysten Labs Treasury, 20% is distributed to early contributors, 14% of the supply is sold to raise funding, and the last 6% is used for a Community Access Program.
The SUI Ecosystem: Explained
Sui may be an early-stage project, but it’s already quite popular, and its ecosystem is still growing. For example, its wallet browser extension has been downloaded over 1 million times.
Today, many developers are building a range of decentralized applications (dApps) on the network in several categories:
In SUI’s DeFi corner, decentralized exchange (DEX) Cetus is the biggest protocol in terms of total value locked (TVL). Turbos, BaySwap, and AnimeSwap are other popular DEXs on Sui. Besides DEXs, yield projects like Mole and crypto lending projects like Scallop are also popular platforms on SUI.
When it comes to NFTs, Wizard Land and Baby Apes Society are two popular projects that have managed to capture broad Sui community support. The network was actually abuzz with the NFT frenzy right after its launch, thanks to its advanced capabilities, such as dynamic NFTs that update in real-time.
Dynamic NFTs are also helping bring the GameFi crowd to Sui with the competitive card game Final Stardust, the social farming game Cosmocadia, and the free-to-play fighting game Rushdown Revolt.
In addition to NFTs, GameFi, and DeFi, developers are also building SocialFi projects like Read2N, Peeranha, and ComingChat, as well as oracles, launchpads, bridges, and domain names.
Start Using the SUI Blockchain
SUI is a fresh layer 1 blockchain that is seeing a lot of activity. But how can you work with it?
To get started with the SUI blockchain in a secure environment, you can make use of the Ledger ecosystem. For this, install the Sui app on your Ledger device. Then, connect your SUI Wallet to your device to interact with the latest NFTs, DeFi, and dApps.
Now, you are ready to explore the ecosystem with absolute security.
Because as you know, security is the priority, and using the SUI wallet protected by your Ledger will ensure that your private keys are never exposed to the internet. When interacting with smart contracts, of which SUI network offers plenty, it’s important to keep your private key offline. Since Ledger wallets store your private keys in a specialized chip (The Secure Element), they are unreachable via an internet connection. As long as you protect your secret recovery phrase, your device cannot grant bad actors access to your private key, meaning you are always in your control.