What is Sui? The latest ‘Solana Killer’ from former Diem Devs

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 3 May 2023. The initial token will be launched on a number of crypto exchanges, including Bybit and Kucoin as of that day.

However, even before the mainnet launch, Sui attracted the attention of 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 basic Bitcoin or Ethereum networks. Layer 1 blockchains are the basic architecture that supports a token – or, in some cases, a wider network of different tokens.

Sui differentiates itself from other Layer 1 chains with its focus on immediate transaction completion, reduced latency in smart contract implementation, 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 Decentralized Finance (DeFi) industry.

Sui’s validators are akin to miners in other blockchain ecosystems. However, the validation system aims to differentiate itself from rivals by offering parallel processing of transactions, which Sui developers believe will increase throughput, reduce latency and improve scalability. The potential use cases of a validation system with parallel processes, including gaming, retail payments and physical points of sale with Sui.

To enable 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 major bottleneck area for many existing blockchains.

Sui’s validation system stands out by offering parallel processing of transactions

Sui was developed by Mysten Labs, led by several former senior executives and architects of Meta’s now-defunct digital wallet program, Novi. It uses one delegated proof-of-stake consensus mechanism, with a new set of token holders electing token stake validators every 24-hour period. Staked tokens are locked during each of these periods, or epochs, but can be withdrawn or changed to a new delegated validator when the epoch changes.

Prior to the mainnet launch, Sui’s developers announced a successful $300 million Series B funding round to support 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 launch of the Sui mainnet on May 3 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. Residents of the United States are not currently 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 issued at launch are available to investors.

Why is Sui in the news?

Shortly before Sui’s launch in May 2023, the Binance exchange announced that 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 significant volume of $56 million in TrueUSD stablecoins in Binance, likely for the purpose of cultivating SUI tokens. This transaction was picked up by the platform Whale Alert, designed to track significant transfers of crypto assets.

Binance CEO Changpeng Zhao responded to Sun’s move by tweeting that Launchpool was designed for retail users, not just whales. He warned that Binance would take action against Sun if he tried to take a SUI token. Sun replied that the deposit was aimed at facilitating market making between exchanges, not participating in any campaign.

Later, Sun said he had arranged for a full refund of the Binance transfer. Binance said it would reallocate the equivalent 279,000 or so farmed SUI tokens to the TUSD liquidity pool.