As one of the representative projects of the Move public chain, Sui represents a different development direction from Ethereum L2. Since the project was launched, there have been many controversies, especially its token issuance method and release model. Some people think it will follow in the footsteps of ICP, while others think it may be similar to the new public chain in 2021. So, what is the current ecological development of Sui? What is the status of token release and demand in the near future?
1. Data on the chain
1. TVL (Total Locked Volume)
As of June 13, Sui’s TVL was $15.22 million, of which DEX Cetus accounted for more than 60% of the TVL. Among all public chains and second layers, the TVL ranks 54th. At its peak, TVL reached $36.01 million, equivalent to a drop of more than 50%. Comparing Aptos, another representative project of the Move series, the current TVL of Aptos is 42.11 million U.S. dollars, and the highest TVL since its launch has reached about 65 million U.S. dollars. The TVL ranking is 34th.
2. Transaction volume
The daily trading volume of the DEX on Sui peaked at over $19 million on May 10 and has since declined. Daily trading volume since June has mostly been between 3 million and 6 million, with trading volumes low.
3. Activity
Since its launch, the total number of transactions has been 16.53 million, the average TPS* is 3, the total number of active addresses is 850,000, and the number of active nodes is 104. As can be seen from the figure below, the highest TPS since launch was 26, which occurred on May 12, the date of Turbos IDO.
*Note: The TPS here refers to the TPS in actual operation, not the TPS that can be operated in theory.
Comparing the TPS of Ethereum L2, Sui’s actual TPS is still very low at present. Looking at the daily active addresses, the highest daily active addresses appeared on May 20, reaching 130,000. The main reason is that on May 19, Cetus opened the permissionless pool function and the meme project was airdropped across the entire network. In normal times, the number of daily active addresses is less than 10,000.
4. Cross-chain bridge
Currently, there are three cross-chain bridges that can send cross-chain funds to Sui, namely Wormhole, kriya.finance and WELLDONE. However, for the specific cross-chain amount, the cross-chain bridge does not have a corresponding data dashboard and cannot be understood.
2. Ecological projects
As of June 14, a total of 66 projects were included in sui.directory on Sui’s official website. These projects are self-declared and filled out by the project parties, and many are still in testing and have not yet been officially launched. A brief review of the projects that have been launched and issued tokens is briefly summarized. The basic situation is as follows:
It can be seen that most of the ecological projects on Sui performed poorly after being launched. The two projects that are the top DEX have both broken. Social platform SUIA fell nearly 81.82%. Suipad performed relatively well, mainly due to its relatively low pricing at IDO, with an FDV of only $5 million. Users and funds on Sui are still relatively limited, which led Abyss World to choose Polygon instead of Sui when it conducted IDO from June 1 to 4.
3. Token Release and Demand
The community is most concerned about the release of Sui tokens. This is a diagram of token allocation and unlocking from token.unlocks, using data from Binance related reports. The total number of tokens is 10 billion, the initial circulation is 528 million, and the circulation ratio is 5.28%.
From May to October 2023, Sui will have two types of releases, one is the release of tokens that have previously participated in the exchange's IEO issuance, and the other is the release of the incentive part of the tokens obtained by the staking nodes. The IEO price is US$0.1 per SUI. The total number of tokens participating in the IEO is 450 million. 1/13 will be unlocked during the public sale, and 1/13 will be unlocked every month thereafter, and will be unlocked in 12 months. Accordingly, approximately 34.61 million tokens are released every month.
SUI token node staking can obtain token incentives, and a total of 1 billion tokens are used for node staking incentives. In the first 90 epochs (1 epoch=1 day), 1.11 million SUI tokens will be awarded every day. The reward will be reduced by 10% every 90 epochs thereafter. There are currently approximately 7.4 billion SUI tokens staked in the system, with an average APY of 5.61%. Based on this calculation, the circulation of this part of the tokens increased by 33.3 million coins per month in the first three months after the launch, and by 30 million coins per month from the 4th to 6th month after the launch.
Accordingly, the IEO release and node pledge incentive release were 67.94 million in the first three months, accounting for 0.67% of the total number of tokens, equivalent to a market value of approximately US$47.55 million; in the 4th to 6th month, it was 64.61 million. Accounting for 0.64% of the total token supply, the equivalent market value is approximately US$45.22 million.
In November 2023, six months after Sui goes online, a large amount will be unlocked. Unlocking more than 1 billion tokens on the same day will double the circulating tokens. From the perspective of token demand, based on the above-mentioned on-chain data and ecological project analysis, it can be seen that transactions are deserted, users are scarce, and there is no obvious demand for SUI tokens in the short term.
4. Comparison of Aptos token release model
Compare Move and Aptos to see the similarities and differences in token release between these two projects. The total supply of Aptos tokens (excluding the staking incentive part) is 1 billion, and the initial circulation is 130 million, accounting for 13%. In the first year after launch, 4.54 million tokens held by the community and foundation will be unlocked every month, accounting for 0.45% of the total token supply, equivalent to a market value of approximately US$28 million. Starting from the second year after the launch, in addition to the community and foundation releases, core contributors and investors will also be released every month. From 13 to 18 months, 20 million coins will be released each month, accounting for 2% of the total token supply; from 19 to 50 months, 6.75 million coins will be released each month, accounting for 0.67% of the total token supply.
In addition, Aptos also has node staking incentives. This portion of tokens is not among the 1 billion tokens mentioned in the initial issuance. Currently, the maximum reward rate (APY) for staking on the network is 7%, with the reward rate decreasing by 1.5% each year until it drops to 3.25%. Currently, there are 860 million APT tokens under pledge in the network, accounting for nearly 86%. It can be seen that the total supply of tokens is 1.039 billion, of which 39.5 million belong to the additional issuance after node staking incentives. Aptos has been online for about 8 months, and the monthly staking incentives are approximately 4.9 million, accounting for 0.49% of the total token supply.
It can be seen that compared with Aptos, Sui is a token with low circulation and high inflation. However, the initial circulation of SUI is lower than APT, equivalent to 50% of APT; the monthly number of tokens unlocked in the first 6 months is higher, 50% higher than APT. SUI's first large-scale release took place 6 months after it went online, and APT 12 months after it went online. SUI used a one-time release, and a large number of tokens entered the market on the day of unlocking, while APT used monthly unlocking. There is a buffer period. In general, SUI will face a larger token supply than APT in the first year, and APT’s large supply will arrive in the second year.
5. Conclusion
From the perspective of on-chain data and ecological projects, Sui has insufficient users, fewer transactions, and is still in the process of cold start. It needs to attract users and capital inflows through continuous activities and construction. However, based on Sui's current operational activities, the team at this stage is still paying more attention to the construction of the technical side, including holding hackathons and holding developer events around the world. User incentives have not been launched yet.
At the same time, on the one hand, in a bear market environment, funds and users tend to be conservative. On the other hand, the second layer of Ethereum is also continuing to develop. For existing users, it is more convenient and safer for funds to enter the second layer from Ethereum. Therefore, it has attracted a large amount of on-site funds. Comparing the two aspects, it is more difficult for Sui to attract funds and users.
From the perspective of the token economic model, compared with Aptos, which is also a Move-based public chain, the pressure to release Sui tokens is concentrated in the first year. Matching such a large token supply with insufficient demand has resulted in the SUI token facing significant selling pressure.