In the crypto and blockchain space, Sui refers to the Sui network or its native token of the same name. Sui is a Layer 1 blockchain with a mainnet launch on May 3, 2023. The native token launches on a variety of crypto exchanges including Bybit and Kucoin as of that day.
Even before the mainnet launch, however, Sui attracted attention from many in the crypto community. Below, we take a closer look at what Sui is and why it is notable in the ever-growing field of blockchains and crypto tokens.
What is the Sui Network?
The Sui blockchain is Layer 1, meaning it provides the underlying infrastructure for a system of validations and transactions in much the same way as the foundational Bitcoin or Ethereum networks. Layer 1 blockchains are the fundamental architecture which support a token—or, in some cases, a broader network of different tokens.
Sui sets itself apart from other Layer 1 chains with its focus on instant transaction finality, reduced latency in smart contract deployment, and overall transaction speed. One of the ways it aims to achieve these goals is through Move, a native programming language based on the Rust crypto programming language. Move hopes to make the development of smart contracts easier for developers, thereby expanding access and functionality within the Decentralized Finance (DeFi) industry.
Sui’s validators are akin to miners in other blockchain ecosystems. However, its validation system aims to set itself apart from rivals by providing parallel processing of transactions, which Sui developers believe will increase throughput, reduce latency, and enhance scalability. The potential use cases of a parallel-process validation system including gaming, retail payments, and physical points of sale using Sui.
To make possible this type of transaction processing, Sui scales horizontally, meaning it has no upper limit to meet application demand, and it can maintain low operating costs with each transaction. Sui does not require global consensus on an ordered list of transactions, which is a key bottleneck area for many existing blockchains.
Sui was developed by Mysten Labs, led by several former senior executives and architects for Meta’s now-defunct digital wallet program, Novi. It utilizes a delegated proof-of-stake consensus mechanism, with a new set of token holders picking validators for token staking every 24-hour period. Staked tokens are locked during each of these periods, or epochs, but can be pulled or changed to a new delegated validator at the time the epoch changes.
Prior to its mainnet launch, Sui’s developers announced a successful $300 million Series B funding round in support of development.
What is the SUI Token?
Sui’s native token, known as SUI, will facilitate the network’s proof-of-stake consensus mechanism, on-chain voting for upgrades to the blockchain, and gas fees. It will also allow Sui users to participate in the system’s DeFi activities.
The May 3 launch of the Sui mainnet is accompanied by a SUI token sale, with each participating crypto exchange offering 225 million tokens. Each user is eligible for up to 10,000 SUI tokens at a price of $0.10 each. For the time being, U.S. residents are not eligible to participate in the sale.
Sui tokens will be distributed both to a community reserve for research and development, grants, and subsidies, and to early contributors to the project, app testers, and other stakeholders. There is a hard cap of 10 billion SUI tokens in total. 14% of tokens released at launch are available for investors.
Why is Sui in the News?
Shortly before Sui’s launch in May 2023, the Binance exchange announced it would make SUI available through Launchpool, a system for users to contribute crypto assets to a liquidity pool to earn rewards. This announcement brought increased attention to Sui, including by Tron founder Justin Sun. Sun deposited a substantial volume of $56 million in TrueUSD stablecoins into Binance, likely for the purpose of farming SUI tokens. This transaction was picked up by the platform Whale Alert, designed to track significant crypto asset transfers.
Changpeng Zhao, CEO of Binance, responded to Sun’s move by tweeting that the Launchpool was designed for retail users, not just whales. He warned that Binance would take action against Sun if he attempted a SUI token grab. Sun replied that the deposit aimed to facilitate market-making between exchanges, not to participate in any promotion.
Later, Sun said that he had arranged a full refund of the Binance transfer. Binance said it would reallocate the corresponding 279,000 or so farmed SUI tokens to its TUSD liquidity pool.