Sui's Emerging Narrative: Is It the Next Big Bet in Blockchain?

To provide a comprehensive and objective analysis of Sui, we’ll be using this scoring system. Each aspect of Sui's narrative is evaluated on a scale from 0 to 20, with higher scores indicating stronger performance in that category. The total score reflects Sui's overall narrative strength in the crypto space. 

Tech Narrative

Sui stands out as a decentralized, permissionless smart contract platform designed with a clear focus on low-latency asset management. It utilizes the Move programming language, a robust and safe language originally developed for Facebook's Diem blockchain. In Sui, assets are treated as objects that can be owned, transferred, and manipulated through custom rules set by the smart contracts.

What truly sets Sui apart is its ability to execute smart contracts in parallel, significantly improving scalability and reducing latency compared to traditional blockchain systems. Additionally, Sui's data architecture, which treats objects as first-class citizens, is a game changer.

Flexible Development Paradigm: Objects Instead of Accounts 

"Sui’s global state includes a pool of programmable objects created and managed by Move packages... This is different from most smart contract languages, which allow only unstructured bytes to flow across contract boundaries." - Sui White Paper

One of Sui's most groundbreaking features is its use of objects instead of accounts, a fundamental shift that sets it apart from traditional blockchains. In most blockchain systems, assets and data are associated with accounts, which limits flexibility and scalability. Sui, treats assets as objects—self-contained entities with their own unique identities, ownership, and states. This object-centric model, powered by the Move programming language, enables more dynamic and versatile applications.

Imagine an NFT that isn't just a static piece of digital art but a living, evolving entity. In Sui, such an NFT could be designed to change in real-time based on external inputs or internal logic. For instance, an NFT representing a digital pet could grow, learn new abilities, or change its appearance as you interact with it. These changes happen instantly and are reflected across the network without the need for complex transactions or account management.

This object-based approach translates into real value by enabling more interactive, responsive, and complex applications. Whether it's gaming, decentralized finance (DeFi), or digital identity, Sui's architecture allows for assets that can adapt and evolve in ways that are not possible with account-based systems. This opens up new possibilities for developers and end-users alike, creating richer, more engaging experiences that drive the next wave of blockchain innovation.

Super Fast: Parallel Transaction Processing

"Execution of smart contracts is also naturally parallelized when possible." -Sui White Paper

Imagine a decentralized gaming platform built on Sui, where players trade in-game assets like rare items, skins, and characters. In most traditional blockchains, every transaction, such as a trade between players or the minting of a new in-game item, would be processed sequentially. This often leads to network congestion and delays, especially during peak times when many players are interacting with the platform. However, on Sui, these transactions can be processed in parallel, meaning that multiple trades, mints, and other operations can occur simultaneously without waiting for one another to complete. This dramatically reduces latency, ensuring that players experience near-instantaneous transactions, keeping the gameplay smooth and uninterrupted.

For instance, consider a scenario where a popular in-game event is happening, and thousands of players are trading rare items all at once. On a traditional blockchain, this could cause significant delays, frustrating users and possibly causing them to lose out on time-sensitive trades. But with Sui's parallel transaction processing, these trades are handled efficiently, with the network seamlessly processing multiple transactions at the same time. This not only enhances the user experience but also supports the platform's scalability, allowing it to handle a growing number of users and transactions without compromising performance.

Great UX & Low Fees: Programmable Transaction Blocks

"On Sui, a transaction is more than a basic record of the flow of assets. Transactions on Sui are composed of a number of commands that execute on inputs to define the result of the transaction. Termed programmable transaction blocks (PTBs), these groups of commands define all user transactions on Sui.." -Sui Developer Documentation

Imagine a decentralized finance (DeFi) platform built on Sui that offers a sophisticated staking mechanism. In traditional blockchains, executing a staking strategy might require multiple separate transactions: depositing assets, staking them in a pool, and setting conditions for automatic compounding of rewards. Each action would normally be a separate transaction, requiring the user to manually execute each one, potentially incurring higher fees and introducing complexity.

With Sui's programmable transaction blocks, these actions can be bundled into a single transaction block, allowing the entire staking process to be initiated and configured in one go. For instance, a user could deposit their assets, stake them, and set up an automated compounding rule—all within one seamless transaction block. This ensures that the staking setup is completed efficiently, without the need for multiple steps or the risk of missing a critical action. This approach not only simplifies the user experience but also reduces transaction costs and increases the reliability of executing complex financial strategies on the blockchain.

Easy User Onboarding: zkLogin & Sponsored Transactions

zkLogin: "zkLogin provides a way for users to authenticate themselves on the Sui network using zero-knowledge proofs, ensuring privacy and security without revealing sensitive information." -Sui White Paper

Sponsored Transaction Blocks: "Sponsored Transaction Blocks allow a third party to pay the gas fees for a transaction, enabling users to interact with the network without needing to hold native tokens." - Sui White Paper

Imagine a decentralized application (dApp) on Sui that offers micro-loans to users in developing countries. Traditionally, accessing such services would require users to create accounts and manage private keys, which can be a barrier for those unfamiliar with blockchain technology. However, with zkLogin, users can authenticate themselves using Web 2 authentication methods that are integrated with zero-knowledge proofs. This allowing them to securely access the platform without revealing any personal information while still having a familiar Web 2 user experience. This feature is particularly valuable in regions where privacy is a significant concern. By utilizing zkLogin, the dApp ensures that users can safely and easily prove their identity, gaining access to financial services without the fear of exposing sensitive data.

Now, consider the same dApp offering micro-loans to users who may not have the resources to pay transaction fees. With Sponsored Transaction Blocks, the dApp can allow users to interact with the platform without needing to hold or pay with native tokens like SUI. Instead, a third party, such as a non-profit organization or a corporate sponsor, can cover the gas fees for these transactions. This removes a significant barrier to entry, enabling more users to benefit from the platform’s services. The combination of zkLogin and Sponsored Transaction Blocks makes the dApp not only more accessible but also more secure, empowering users in underserved regions to participate in the global financial ecosystem without the typical hurdles associated with blockchain technology.

Gaming, Lotteries & Fairness: Secure Randomness

Sui’s introduction of native randomness opens up a world of possibilities for developers, particularly in applications where fairness and unpredictability are paramount. Imagine a decentralized raffle system where participants purchase tickets in hopes of winning a prize. With Sui’s randomness feature, the selection of the winning ticket can be done in a truly unbiased and secure manner. The randomness is generated by Sui’s validator network using a Distributed Key Generation (DKG) protocol, ensuring that the winner is chosen fairly and cannot be predicted or manipulated. This transparency builds trust among participants, as they can be confident that the outcome is based purely on chance, without any external influence.

Another compelling use case is in gaming, where randomness can play a critical role in enhancing the player experience. Take, for example, a blockchain-based RPG where a character’s success in a battle depends on random factors like critical hits or dodges. By leveraging Sui’s secure randomness, game developers can ensure that these in-game events are both unpredictable and fair, providing a more immersive and engaging experience for players. The randomness generated by Sui operates in parallel to its consensus mechanism, meaning it is not only secure and unbiasable but also fast, allowing games and other applications to deliver real-time responses without lag. This combination of speed, security, and fairness makes Sui’s native randomness a powerful tool for developers looking to create more dynamic and trustworthy decentralized applications.

Deflationary Tokenomics (Long Term)

"Sui has a native token $SUI, with a fixed supply (10B). $SUI is used to pay for gas, voting, and is also used as delegated stake on authorities within an epoch." - Sui Documentation

The SUI token is the backbone of the Sui ecosystem, serving multiple essential functions that support the network's operations and governance. With a fixed supply, SUI ensures scarcity, which can help maintain its value over time. The primary use of SUI is to pay for gas fees on the network, which covers the cost of executing transactions and running smart contracts. This ensures that the network remains secure and that resources are allocated efficiently. Additionally, SUI can be staked by users to participate in the network’s consensus mechanism, where they delegate their tokens to authorities who validate transactions and maintain the network's integrity. The amount of SUI staked determines the voting power of these authorities, directly influencing the network’s decision-making process and overall security.

Beyond its utility within the network, SUI also plays a crucial role in the network's incentive structure. Validators and their delegates are rewarded with SUI for their contributions to the network, which includes validating transactions, producing blocks, and maintaining network uptime. This reward mechanism not only compensates those who help secure the network but also encourages broader participation from the community, aligning the interests of token holders with the long-term success of the platform.

Furthermore, the fixed supply of SUI introduces a long term deflationary aspect, where, as the network grows and more SUI is used for gas and staking, the remaining supply becomes increasingly valuable. This creates a dynamic where early participation and long-term holding of SUI tokens can be particularly rewarding, both in terms of staking rewards and potential value appreciation.

In the short term $SUI is inflationary. More on the token unlock schedule in the report below. 

Sector Narrative

Creating tech narratives from an altcoin's white paper is fun. But the real story is found in the sectors it dominates.

Sector Narrative refers to the overarching story or theme that defines a particular industry or segment within the blockchain ecosystem. It’s the collective vision, purpose, and potential of a specific sector. Examples include decentralized finance (DeFi), non-fungible tokens (NFTs), supply chain management, infrastructure, AI, DePIN, and gaming. A blockchain's dominance in these sectors drives start-up interest, adoption, and investment. A strong sector narrative can propel entire industries forward, attracting both developers and investors, while a weak or unclear narrative can hinder growth and innovation.

In the context of blockchain projects like Sui, Sector Narrative plays a crucial role in determining how the project fits into the broader market landscape. It assesses how well a project aligns with the current trends and demands of its sector, and whether it has the potential to become a leader or disruptor within that space. Understanding the Sector Narrative helps investors and developers alike gauge the long-term viability and relevance of a project within its specific industry.

Sui by Sector

At the time this article was published, Sui boasts over 300K daily active users.

In this analysis, we'll first explore the key sectors Sui highlights on its website. Then, we'll dive into the data to uncover where the majority of these daily active users are concentrated as of the release of this article.

The primary sectors Sui emphasizes are Gaming, Commerce, and DeFi.

1. Gaming: 

"Sui offers what games built on blockchain require: well-rounded functionality, abstraction, scalability, speed, and affordability. Dynamic assets increase engagement. Customizable transfer policies offer control." -Sui Website

The example we discussed earlier in the tech narrative perfectly illustrates why Sui could be an epic choice for gaming companies. In-game assets can be dynamically altered in real time based on events throughout gameplay. For instance, an NFT could change its traits and ownership percentages based on various gameplay mechanics and milestones.

2. Commerce & Loyalty

"Creatively expand growth and retention programs by integrating Sui’s dynamic and composable assets. Users can authenticate with web credentials to reduce friction." - Sui Website

Imagine a retail brand launching a loyalty program powered by Sui’s blockchain. Instead of traditional points, customers earn dynamic NFTs that evolve based on their shopping behavior. For instance, an NFT could unlock special discounts, exclusive products, or personalized offers as a customer reaches certain spending milestones. This creates a more engaging and rewarding experience, encouraging repeat purchases and deeper brand loyalty. Additionally, the seamless authentication through web credentials means customers can easily access and manage their rewards without cumbersome logins or apps, reducing friction and enhancing user satisfaction.

3. DeFi: 

"Users can conduct transactions as close to market conditions as possible. Builders can create innovative products with liquidity from a native central limit order book, providing fully onchain routing and matching." - Sui Documentation

Imagine a decentralized exchange (DEX) built on Sui that leverages DeepBook, Sui's first native liquidity layer. DeepBook provides the infrastructure for transparent, efficient, and privacy-focused token trading by utilizing a central limit order book (CLOB) architecture. This setup allows users to enter market and limit orders, ensuring they can trade tokens at prices that closely reflect current market conditions, whether they are buying at the market rate or setting specific limits.

For developers, DeepBook offers an open and permissionless environment, complete with an SDK that supports building custom token trading functionalities. DeepBook doesn't include an end-user interface but provides the essential trading backbone that DEXs, wallets, or other apps can integrate into their platforms. This means that DeFi builders can focus on creating innovative financial products, knowing that DeepBook’s CLOB will handle liquidity with transparency and precision, automatically matching bids and asks in real-time. This combination of transparency, privacy, and flexibility makes DeepBook a powerful tool for advancing Sui's DeFi ecosystem.

On-Chain Data

So far we've looked at tech narratives and sector narratives that originated by Sui. Now let's look at some on-chain data by sector so we can see how well the narratives line up with the network activity. 

Sui Daily Active Users vs Solana

Let's look at overall daily active users first. 

Below we can see Sui at about 400K compared to Solana's 2M

Sui Daily Transactions vs Solana

Here we see Sui's daily transactions versus Solana's.

Sui vs Solana: Total Value Locked

Below we see how Sui compares to Solana in Total Value Locked (TVL).

Sui vs Solana: Fees

Below we see Sui vs Solana in terms of User Fees.

Users paid ~$5K in fees on Sui vs ~$500K in fees on Solana

Sui Active Addresses by Sector

Below we see what sectors Sui's daily active users are coming from. 

It appears to be three. Details in the next section. 

Sui Active Addresses by Application

When we look at the chart below we see that the majority of Sui's daily active addresses are coming from three apps:

• Wave Wallet Telegram: 79% of top ten apps
• FanTV: 13.2% of top ten apps
• Aylab: 6.8% of top ten apps

Wave Wallet

We can see Wave Wallet has almost 80% of the top ten daily active users

Wave is an easy to set up Wallet that's integrated with Telegram. No need to download another app. The app is installed directly on Telegram. It takes less than a minute (including writing down your seed phrase).

From there you can start playing games, staking and more. 

FanTV

FanTV has 13.2% of the topten daily active users. Dubbed as India’s best Watch To Earn Platform, It is a content creator platform where creators can upload videos and consumers can watch to earn. Sui provides the Web 2 user experience with Web 3 running under the hood. 

Aylab

Dubbed as the most powerful Web 3 adverising engine, Aylab enables Web 3 companies to run targeted ads at Web 3 users. It also has a sports and gaming platform that merges traditional sports with esports. Aylab uses Sui under the hood to give users of its sport platform a Web 2 user experience with Web 3 capabilities under the hood. 

Sentiment

Understanding community engagement and influencer sentiment around Sui is crucial.

Until DeFi Divvy completes its AI-driven Sentiment Algorithm, we rely on Santiment for insights.

Below, we observe that sentiment remains mostly positive (green) throughout 2024.

At first glance, the chart can be confusing, with the negative line (red) appearing higher than the green. However, when you compare the green and red lines side by side on the right, it’s clear that positive sentiment consistently outpaces the negative.

https://app.santiment.net/charts/CDI6ILzr__sCl

When we do see the different between positive and negative get narrow it happens around a time when a massive token unlock happened, which increased $SUI supply. 

Token Unlocks

When the gap between positive and negative sentiment narrows, it typically coincides with significant events, such as a massive token unlock that increased the $SUI supply.

In addition to the token unlock, there were reports that VCs and other vested holders could still stake their locked tokens, which may have influenced sentiment.

As per Token Unlocks you can see that Sui will have roughly 4B tokens in circulation by the end of 2025, and the majority in circulation by 2030. 

Scoring