Following the growth mixed with Crypto Airdrops in recent times, Ethereum Layer-2 infrastructure – Sui Blockchain has released Tokenomics about the project.
Sui Blockchain – Mysten Labs startup in the last year of its testnet and mainnet launch has raised over $300 million at a $2 billion valuation with participation from Binance Labs, Coinbase Ventures, a16z crypto, Jump Crypto, Circle Ventures and other prominent VC heavyweights.
Launched in 2021, Mysten Labs consists of former Meta employees who previously worked at Novi research, the Diem blockchain and the Move programming language. The company’s first product will be Sui, a Proof-of-Stake-based blockchain that will cater to developers and creators regardless of their background.
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“Sui combines the secure asset-centric features of Move with a new object-centric data model. This pairing enables new approaches to multiple blockchain scaling challenges and unlocks a more direct, accessible programming style for the next generation of smart contract developers,” said Sam Blackshear, Mysten’s co-founder.
According to a Twitter publication posted on SUI’s official page, the layer2 blockchain formation is streamlined to front-end speed and low-cost gas transactions on EVM. The goal of Suis tokenomics is a thriving economy there: fees are low enough for people to use the chain.
The Sui community has grown tremendously, so we recently published a blog that provides an overview of the basics of Sui tokenomics to bring everyone up to speed.
?Let’s dive in? pic.twitter.com/eyIiCh9dH9
— Sui (@SuiNetwork) 21 April 2023
Apparently construction costs are low plus predictable for a sustainable business model and activity is high/reliable for operators to plan their budget.
However, the Sui economy has three main sets of participants: Users who create, modify or transfer digital assets or use apps on Sui; SUI holders who either stake money to validators or pay fees to interact with on-chain assets and apps; validators that manage transaction processing and execution.
SUI participants interact in a variety of ways across the network, and this interaction informs the three core components of Suis tokenomics:
Proof-of-Stake mechanism
Gas mechanism
Suis storage fund
SUI tokens serve four purposes. They can be staked to a validator to secure the network which can be used to pay gas fees to perform transactions and other operations.
Sui tokens can be used as a natural asset for on-chain transactions, and it gives holders the right to participate in future governance. With Delegated Proof-of-Stake, Sui allows the widest possible participation of SUI holders in its business.
Staked SUI is a proxy for voting power, and provides the right degree of “skin in the game” – those who care most about Sui get a bigger voice in the operation. Unfortunately, the SUI chain has denied that it will not issue SUI token airdrops to the community, but will launch an ICO on whitelisted addresses – a situation that has been met with intense resentment on Crypto Twitter as many claim that the chain was riding the hype around airdrops in 2022.
Consequently, Sui’s gas pricing mechanism achieves several important results; provides users with low, predictable transaction fees and encourages validators to optimize transaction processing and ultimately prevents spam and denial of service attacks.
Sui’s Storage Fund distributes past transaction fees to future validators. Users pay fees for processing plus storage, which are then deposited into the fund. If the storage needs go up, validators receive additional stake rewards to cover the costs, and vice versa when the needs are.
