Current Status of Sui Ecosystem Development and Token Analysis

Since its launch on May 3, Sui, as one of the representative projects of the Move-based public chain, has taken a different development path compared to Ethereum L2. In the more than 40 days since the project's launch, it has been surrounded by controversy, especially regarding its Token issuance method and release model. Some worry that it will repeat the mistakes of ICP, while others hope it can replicate the success of new public chains in 2021. So, how is the ecological development of Sui? What are the recent Token releases and demand like?

1. On-chain Data Analysis

1. Total Locked Amount ( TVL )

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

In comparison, another Move ecosystem representative project Aptos currently has a TVL of 42.11 million USD, with an all-time high of about 65 million USD, ranking 34th.

2. Trading Volume

The daily trading volume on the DEX of Sui peaked at over $19 million on May 10, and has since shown a declining trend. Since June, the daily trading volume has mostly remained between $3 million and $6 million, indicating low trading activity.

3. Network Activity

Since its launch, Sui has reached 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 of the network was 26, which occurred during the Turbos IDO on May 12.

Compared to Ethereum L2, Sui's actual TPS is still at a relatively low level.

In terms of daily active addresses, the peak occurred on May 20, reaching 130,000, mainly due to the opening of the permissionless pool feature by Cetus on May 19 and the airdrop of the meme project across the network. On normal days, active addresses are usually below 10,000.

4. Cross-Chain Bridge

Currently, there are three cross-chain bridges, Wormhole, kriya.finance, and WELLDONE, that support fund transfers to Sui, but there is a lack of specific cross-chain amount data.

2. Overview of Ecological Projects

As of June 14, the official Sui directory has recorded 66 projects, most of which are still in the testing phase. Projects that have launched and issued tokens generally performed poorly, with leading DEX projects all experiencing a drop in value, and the social platform SUIA falling nearly 81.82%. Only Suipad performed relatively well, mainly due to 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 IDO on the Polygon network instead of the Sui network.

3. Token Release and Demand Analysis

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

Approximately 34.61 million tokens will be released each month for the IEO portion, with node staking incentives releasing 33.3 million tokens each month for the first three months, and 30 million tokens each month from the 4th to the 6th month. In total, the average monthly release is 67.94 million tokens for the first three months (accounting for 0.67% of the total), and 64.61 million tokens for the 4th to the 6th months (accounting for 0.64% of the total).

November 2023 will see a large-scale unlocking, with over 1 billion Tokens unlocked on that day, which will double the circulating supply of Tokens.

However, from the demand side, the Sui network currently has low trading activity and few users, with a lack of obvious demand for SUI Token in the short term.

4. Comparison with Aptos Token Release Model

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

In comparison, Sui has a lower initial circulation, but a higher average monthly unlocking amount in the first six months. Sui adopts a one-time large-scale release model, while Aptos chooses a slow monthly release. Overall, Sui faces greater token supply pressure in the first year, while Aptos's pressure is mainly concentrated in the second year.

5. Conclusion

Sui is currently in a cold start phase, with a small user base and low trading volume. It needs to attract users and funds through continuous activities and ecosystem development. However, the current team is more focused on technical construction and has not yet launched large-scale user incentive measures.

In a bear market environment, investors tend to be conservative, and with the rapid development of Ethereum's layer two networks, Sui faces significant challenges in attracting funds and users. From the perspective of the token economic model, the release pressure of Sui's tokens is concentrated in the first year. In the case of insufficient demand, such a large supply of tokens may lead to significant selling pressure on the SUI token.