Project History
The project stems from Meta’s Diem and Move initiatives. After Diem was shelved, key engineers left Meta to build Sui using the Move programming language, originally developed at Meta.
Sui started as a testnet in 2022 and officially launched its mainnet in H1 2023.
The zkLogin feature was added in September 2023, allowing users to log in using familiar Web2 accounts from providers like Google, Facebook, Twitch, and Apple, eliminating the need for separate wallet installations or managing seed phrases, making it easier for users to participate in the Sui ecosystem.
In July 2024, Sui introduced a new consensus protocol that made Sui the fastest blockchain at the time in terms of finality time, latency and transactions per second.
Technology/Approach
Sui primarily targets scalability, low latency, and a developer friendly environment.
The protocol uses a fully object centric model, for now unique to Sui, treating assets as programmable objects. This means that transactions mutate objects directly, and simple transactions can bypass consensus, making Sui ideal for high throughput applications such as gaming.
A key driver of Sui’s high scalability is parallel transaction execution, with Sui being one of only a small number of blockchains using this model.
Sui targets consumer grade applications, including gaming, social apps, and NFTs — areas where low latency and high throughput are critical.
Sui also places strong emphasis on the developer experience, providing robust software development kits.
Sui has not experienced any major outages or hacks since its mainnet launch in May 2023, which is notable given the complexity of launching a new Layer 1 blockchain. Mainnet uptime has been stable, with no reported systemic failures or downtime like those seen on Solana. The parallel execution model and object-centric architecture have also not shown critical vulnerabilities under load.
Sui benefits from the Move programming language which was designed with formal verification and asset safety in mind.
Key People/Team
Sui was created by Mysten Labs, a company founded by former Meta engineers who worked on the Diem blockchain and the Move programming language. The key people are CEO Evan Cheng, the former Director of Engineering at Meta and co-creator of the Move language, CTO Sam Blackshear and Chief Scientist George Danezis. The founders have deep technical credibility from Meta, giving Sui a strong technical foundation.
Sui was backed by top-tier VCs (a16z, Binance Labs, Jump Crypto) which has added to the project’s credibility, helping initial ecosystem growth and attracting developers.
The initial USD 300m fundraising by Mysten Labs in 2022 was led by FTX Ventures. After the FTX bankruptcy, Mysten Labs repurchased both the equity stake granted to FTX and the right to future tokens. This protected Sui’s reputation from being associated with FTX, simplified governance ahead of the mainnet launch, and ensured that future token unlocks would not be impacted by the actions of the bankruptcy estate.
Ecosystem
Network effects are extremely strong in crypto, and it is very hard for new blockchains to compete against incumbents, even when the technology is excellent and brings real advantages in transaction speed and cost.
Of the new high-performance challenger blockchains, arguably Sui has come the closest to gaining a foothold in key markets vs Ethereum and Solana. Sui earns monthly fees of approx. USD 1m currently (USD 1.5-2m during the memecoin bubble late last year/early this year). This is double Avalanche’s and triple Aptos’s fees generated, but it is nonetheless still very far behind the fees paid to Ethereum, Solana, or TRON, with those three protocols generating USD 500m to USD 800m of fees a month in aggregate.
Sui’s DeFi TVL has grown strongly over the last 6-12 months, reaching a 1-1.5 percent market share.
Sui’s efforts to build market share vs entrenched competitors include a host of partnerships, as well as its unique Web2 integration strategy, explicitly positioning itself as a bridge between Web2 and Web3, especially in consumer-facing applications. This includes offering Web2-style SDKs, APIs, and simplified onboarding tools to reduce friction for traditional developers, and a focus on a low latency, high throughput infrastructure to support applications which involve real-time user interactions (such as games and social platforms).
Additionally, Sui is partnering with Web2 native companies in gaming, e-commerce, and social media, including building NFT and gaming platforms with Web2 UX standards.
Sui is also targeting tokenisation – a use case its technical architecture is particularly well positioned for, however, its market share remains low at this early stage. Similarly, Sui’s stablecoin market share is still very small, although growing fast.
Supply Model/Tokenomics
Unlike most proof-of-stake blockchains, which have an inflationary model (sometimes combined with token buybacks from fee revenues to offset the inflation), Sui has a supply cap of 10 billion tokens – a tokenomics model more similar to Bitcoin.
Half of the tokens were granted to the Sui Foundation for ecosystem development, while 10 percent is earmarked for validator rewards. Over half of the supply remains locked, with a monthly unlock schedule until 2030.
For now, Sui is governed by the Sui Foundation, typical of early-stage projects. However, the intention is to transition to a decentralised governance model over time. In future, tokenholders will be able to decide on matters such as the use of the Foundation’s token holdings, or even changes to validator remuneration and the supply cap.
Key Value Drivers
Sui has garnered strong narrative support, widely seen as the likeliest challenger blockchain to make real market share gains over the medium-term vs Ethereum and Solana. As a result, it has been trading with a high beta to the market, and it is likely to be an outperformer in an altseason.
Nonetheless, the crypto market has become much more discriminating over time, with sharp price reversals for projects that do not deliver the expected growth in adoption. Sui’s market capitalisation at the moment far exceeds its share of crypto fees generated, reflecting the market’s expectations for strong growth.
Numerous factors support continued growth in adoption, including the project’s technical excellence, genuinely novel architecture, market-leading scalability, unique Web2 integration strategy to support onboarding new users, and the Sui Foundation’s sharp focus on supporting ecosystem growth and forging partnerships.
Competing with Ethereum’s and Solana’s massive developer and user bases still remains a tough challenge as network effects are hard to overcome, and after a period of the market favouring integrated architectures such as Solana or Sui, attention is shifting back to Ethereum’s modular architecture where high potential use cases such as stablecoins and tokenisation can build on tailored Layer 2 protocols.
Winning an important niche might be Sui’s best path to a sustainable foothold, with Web3 gaming the likeliest candidate as Sui’s architecture is ideal for real-time, asset-heavy applications like games. Sui also has a technological advantage in hosting social and consumer applications (e.g. loyalty programmes) but decentralised projects in these sectors have struggled to compete with their centralised counterparts. Gaming, however, continues to account for a high share of all blockchain-based transactions, and with Sui building a complete on-chain gaming economic system, they could become the biggest winner of an eventual explosion of on-chain gaming as the UX levels up to Web2 standards.
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