Sui (SUI)

Sui is a L1 blockchain built with Move, wanting to focus on NFTs and GameFi

Basics

• Based in:
• Started in / Announced on: Mysten Labs launched in September 2021.
• Testnet release: "Sui is currently running a public devnet and is launching its incentivized testnet next month." (11-7-2022)
• Mainnet release: scheduled (24-3-2023) for Q2 2023, launched on 3-5-2023.
• Not to be confused with Sei

History

• Building and extending on years of research at Meta (Facebook). From this twitter thread by Figment (11-7-2022):

"The business was founded by @EvanWeb3, @EmanAbio, @b1ackd0g, @GDanezis, @kostascrypto – all of whom were formerly building Novi or Diem at Meta."

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• Awarded CertiK a $500K bounty for the discovery of a critical vulnerability. The vulnerability could have stopped Sui from processing new transactions, locking the network in an indefinite loop.
• Had a "Billion Dollar Bug" (5-2023) which was found by Zellic when asked to do an audit for Sui and got disclosed. It would have effected Aptos, Sui and all other Move L1's.

Token

Launch

• From Decrypt (3-5-2023):

"The platform’s native asset, the SUI token, has been in the midst of an initial coin offering, or ICO, since April 20. It will end on May 3, when the mainnet goes live. Investors have been purchasing IOU versions of the token, albeit from four smaller exchanges: BitForex, DigiFinex, HotBit and SuperEx. After the token launches, it will be listed on OKX, Kucoin, Bybit, and Binance."

Token Allocation

• Sui Foundation denied selling staking rewards or other tokens from locked & non-circulating staked SUI on Binance after CT found txs that seemed to indicate this. A further explanation is promissed.
• From a commissioned Messari report (3-5-2023):

"Community Reserve (50%): The Sui Foundation will control half of the maximum SUI supply with the goal of distributing it via community programs including:

1. The Delegation Program, which will bootstrap community-run validators
2. The Grants Program, which will distribute tokens to developers, community ambassadors, and other participants contributing to Sui
3. A Research and Development fund
4. And validator subsidies, with the intent to subsidize early validators with extra staking rewards for a limited amount of time.

Early Contributors (20%): A fifth of the maximum SUI supply will be distributed to Sui’s research and production teams, namely its initial contributor, Mysten Labs.

Investors (14%): Sui Foundation has not publicly disclosed any sales of the SUI token to investors.

Mysten Labs Treasury (10%): Mysten Labs did not disclose what this allocation will be used for.

Community Access Program and App Testers (6%): The Community Access Program includes a whitelisted public sale (called a Recognition Sale) that is only open to early Sui community members as proxied by their participation in Sui’s Discord channels. In addition, it includes a General Sale open to the broad public. Both the Recognition and General Sales will be implemented by specific partner crypto exchanges."

• From this twitter thread by Figment (11-7-2022):

"The SUI token has a 10B total supply. It’s set to be distributed between the founding team, investors, a public sale, the Sui foundation, and future emissions. The exact initial token distribution will be released in the coming weeks."

Inflation

Went from 4.4% in Q2 2023 to 3.2% in Q1 2024.

Utility

• From this twitter thread by Figment (11-7-2022):

"Sui’s token serves 4 roles: 1. Staking / Security 2. Transaction fees 3. Governance 4. Unit of Account / Medium of Exchange"

Technology

• Whitepaper or docs can be found [insert here].
• Code can be viewed here.
• Consensus mechanism: designated Proof-of-Stake (dPoS) (3-5-2023)
• Algorithm: DAG
• Virtual Machine:
• Programming language used: Sui Move, "Sui uses a minor variation of Move to improve network performance and ease the developer experience. This intuitive programming is perfect for dynamic NFTs and crypto games that constantly mix and modify digital objects." (17-7-2022)

Transaction Details

Capacity (TPS) & Latency:

• "Sui’s latest testing revealed that it has reached throughputs of 297,000 simple transactions per second with less than a half-a-second latency. This speed coupled with the modularity of the ordering/consensus algorithms has attracted blockchains like Celo and Sommelier to integrate Narwhal into their protocols." (3-5-2023)
• "Early results running Sui on a MacBook pro were able to process over 120K token transfers per second." (11-7-2022).
• "Its consensus algorithms focus on minimizing the communication that’s needed between validators to process transactions. This leads to simple transfers being validated nearly immediately, while complex transactions are executed within 2-3 seconds."
• Sui's new Mysticeti consensus engine delivers low latency, with early results showing P50 latency of 629 ms in Western Europe.

How it works

• From (23-1-2024) Sui (so biased):

"Sui uses a state access method for transaction parallelization and its object-centric data model ensures clarity in state access. Each object exists independently, and every object involved in a transaction must be declared in that transaction. As long as a transaction doesn't interact with an object used in another transaction simultaneously, they are parallelizable. Additionally, transactions not involving a shared object bypass consensus entirely."

• From a commissioned Messari report (3-5-2023):

"Sui combines both approaches into a hybrid model [of accounts and UTXOs] where its history is stored in objects with globally unique IDs. The objects also contain metadata that determines different object characteristics, like ownership and transaction history (partially derived from object nonce values, also called version numbers). Sui’s object-centric data model implies that the global state is simply a collection of all Sui objects. Structurally, this takes the form of a directed acyclic graph (DAG), where objects correspond to vertices, transactions correspond to edges, and objects called “live objects” correspond to vertices without outgoing edges.

In Sui, all transactions take objects as input and produce new or modified objects as output. Every object contains the hash of the last transaction that produced it. “Live” objects are those that are available to be used as inputs. Hence, the global state can be determined by observing all live objects. Sui’s object-centric data model allows it to parallelize object interactions at scale. Transactions on Sui are grouped based on the object interacted with. When multiple transactions are submitted simultaneously, validators can process the transactions in parallel on separate machines, so long as the transactions are not interdependent.

Sui validators do not batch transactions into blocks like normal blockchains; instead, they validate transactions individually while transactions ultimately obtain a certificate of finality at the end of the process. Because transactions are grouped by objects, validators can process different objects’ transactions in parallel, both in relation to each other and on their own machines (called “workers”). The resulting parallel transaction submission enables execution on a massive scale.

Complex transactions, which involve shared objects, undergo ordering and consensus via Sui’s Narwhal and Bullshark protocols. The Narwhal mempool maintains the availability of submitted transaction data and provides a structured path in the form of a directed acyclic graph for traversing (choosing an order on) this data. Bullshark consensus picks a specific ordering of this structured data by agreeing on a particular DAG traversal (ordering based on the DAG structure)."

• From this Sui & Aptos comparison thread (26-7-2022):

"Sui uses a DAG-based mempool (Narwhal) + Tusk consensus algo. The DAG is then exploited at the execution layer for parallelization (cool!). In contrast with Avalanche (Snowman++) which doesn't unlock the full power of the DAG for parallelization yet."

• From this twitter thread by Figment (11-7-2022):

"Key to Sui's performance is transaction parallelization. In most blockchains, transactions must be ordered and placed into a block to be executed sequentially. Sequential execution unnecessarily restricts throughput on these chains – most transactions are independent. Because Sui requires that dependencies of transactions be explicitly stated, it’s able to process them in parallel. In the minority of cases where transactions are intertwined, Sui still allows them to be ordered and executed sequentially. This is done by using 2 different paths to consensus:

1. Byzantine Consistent Broadcast for independent transactions
2. BFT consensus for dependent transactions.

While storage on most blockchains is centered around accounts, Sui’s storage is designed around objects. Each object is owned by an address and is mutable by default, but can be made immutable or shared between multiple addresses. Sui’s Move smart contracts can receive these objects as inputs, manipulate them, and return objects as outputs. This is a fundamentally different smart contract programming paradigm than Solidity or Rust.

Whenever a user submits data on-chain, they must pay both gas fees and fees to Sui’s “storage fund”.  This fund covers the real-world cost for validators to store the user’s data. As the network matures and the cost of storage increases, validators are paid out through the storage fund. Additionally, once a user no longer needs to store that data, they can delete it and receive a rebate from the storage fund."

Fees

• From a commissioned Messari report (3-5-2023):

"Gas fees on Sui consist of two components: computation and storage. Computational gas fees are determined by a gas-pricing mechanism where validators set a minimum gas price per transaction for the current epoch. A “reference gas price,” which is the 2/3’s percentile price by stake, is then publicized to users. Validators (but not delegators) are rewarded with storage fund rewards depending on the size of the storage fund at the start of an epoch.

Sui’s storage fund is a means for financing data storage on the network. By adding the ability to store arbitrary amounts of data, Sui built a solution to a common data storage problem: an environment where the validators who originally stored the data may be different from the future ones that maintain that stored data.​​ Sui’s storage fund receives storage gas fees and a portion of the network’s staking rewards (computation gas fees plus inflationary/unlocking SUI). The staking rewards accrued by the storage fund are then redistributed to validators immediately. Users that store files on Sui can be refunded for all of the gas storage fees they paid when they delete those files from storage. Storage fees are never paid out to validators.

Sui plans to add a feature that would allow applications to subsidize and abstract away consumer gas fees."

• From this twitter thread by Figment (11-7-2022):

"Sui runs in epochs. Every epoch (24 hours), the validator set changes. At that time, the new epoch’s validators vote on a reference gas price for the entire epoch. he protocol then provides a number of incentives to validators to keep transaction fees close to the reference price throughout the entire epoch. By providing more stable gas prices, transactions submitted to Sui are processed at more predictable speeds. Because the network’s throughput scales linearly with more workers, validators can add more workers proportionally to increases in network demand. This keeps prices close to the reference price."

Staking

• From a commissioned Messari report (3-5-2023):

"All honest validators are rewarded with gas fees and temporary unlocking subsidies (Sui did not specify an exact end date) — collected in the epoch proportional to their size of staked SUI. In Sui, all honest validators grow at the same rate."

Validator Stats

• From a commissioned report by Messari (24-4-2024):

"Active validators on Sui have remained fairly steady since launch, with slight growth from 104 to 106. With the Sui Foundation and Mysten Labs holding a significant portion of the total supply on behalf of the Ecosystem allocation, they can help distribute stake rather equally among validators."

• From a commissioned Messari report (3-5-2023):

"Sui’s Testnet has 97 validators, only two of which are run by Mysten Labs. Recommended hardware requirements for validators include physical 24-core CPUs/48 virtual CPUs, 128 GB of RAM, and 2 TB of SSD storage (NVMe recommended)."

Other Details

• From a commissioned Messari report (3-5-2023):

"Sui objects can have four different types of ownership:

1. Objects owned by an address (NFTs or fungible tokens)
2. Objects owned by other objects (e.g., with gaming NFTs, a sword NFT could be owned by an avatar NFT)
3. Shared objects that anyone can read/write to (DEXs or auction contracts)
4. Immutable objects without an exclusive owner that are read-only (auctions frozen as immutable after the end of an auction)"

Roadmap

• Can be found [Insert link here].

Revenue

• From a commissioned report by Messari (24-4-2024):

"Went from $500K in Q3 2023 to $777k in Q1 2024. Sui revenue is the sum of all fees collected by the protocol. Once collected, all Sui revenue is distributed to validators. Revenue reached a quarterly high of 807,000 SUI in Q4’23 but fell by 35% QoQ in Q1’24."

Usage

• From a commissioned report by Messari (24-4-2024):

"Sui’s DeFi TVL increased by 1,459% to $786.6 million in the past two quarters. Incentive programs have helped drive growth, with several top protocols, including NAVI, Scallop, and DeepBook, launching or announcing tokens in Q1’24.

During onchain gaming quest, Quest 3, Sui sustained an average of 151,000 daily active addresses, peaking at 453,000. Excluding that period, Sui averaged 24,000 daily active addresses in the past two quarters."

• In DeFi, lending protocols dominate: Scallop and Navi on Sui with $156M (20-2-2024).
• Sui’s Devnet and Testnet supported over 200 projects (3-5-2023).

Competition

• Layer 1 blockchains and Aptos in particular. Solana as well.
• From Decrypt (3-5-2023):

"Although Move was not initially designed with NFTs in mind, Sui Move is looking to change that by implementing certain NFT-specific functions. Unlike another popular language, like Rust—which is used by Solana and focuses on “accounts”—Sui is centered around “objects.” That has made it possible for objects on Sui to be owned by a single user or “shared,” which can then be modified by users as long as they follow certain smart contract functionalities."

• From Delphi Digital (8-9-2022):

"Both Aptos and Sui aim at maximising the throughput of the network at every node, similar to Solana but with a very different technical approach. One of the core ideas of the design seeks to optimise the mempool dissemination layer by distributing a DAG of transactions and guaranteeing availability.

Both share the potential ability to scale beyond individual validator performance, via internal sharding of a validator and homogeneous state sharding. Internal sharding means that a validator won’t need to scale vertically, increasing its specs to match that of the network, but it can spawn other machines behind a load balancer and shard the state as if it were a single node. This is essentially addressing a concern with Solana that validator specs will bottleneck performance and elegantly achieve scalability."

• From this Sui & Aptos comparison thread (26-7-2022):

"Sui's version of Move has introduced some modifications, the most visible being the ownership API. It is more clean and it exposes the blockchain design more clearly IMO. But the libraries feel a little bit less developed than Aptos'. Aptos uses BlockSTM, which is an evolution of the high-performance HotStuff algorithm, and introduces parallelization by dynamically detecting dependencies and scheduling execution tasks (taking its inspiration from Software Transactional Memory). It's hard to tell which one will perform better in practice, but my bet is with Sui. Aptos has done already a very good job at optimizing their current design, whereas Sui seems to have more room. The two-paths of byzantine agreement give Sui an edge as well.

Sui tackles [state bloat] via efficient sharding of the store, focusing on horizontally scaling the resources. Aptos on the other hand puts more emphasis on supporting heterogeneous validators (contrained CPU and/or constrained storage). I like Sui's take on this.

They are both at a similar stage of development, with Aptos a bit ahead. It took me longer to set up the system than actually coding (I also happen to use NixOS). Learning the language and the environment involves some trial-and-error. Deploying to devnet is somewhat cumbersome in both as well. Fortunately, the unit test libraries are quite usable. The worst part has definitely been the obscure compiler errors, and devnet error responses that make no sense. These can be real time sinks."

Pros and Cons

Pros

• Highly scalable according to early tests (5-2023)

Cons

• Turned out to have its own 'locked' team tokens not actually locked in smart contracts but in traditional contracts. One of their contracters decided to move tokens and this got noted. Sui Foundation "terminated its relationship with the MovEx team. No future tranches of SUI tokens will be distributed to MovEx nor will MovEx remain one of the main contributors of the DeepBook smart contract." Giving DeepBook a setback and the Sui reputation a blow (27-7-2023).
• Only 6% of the supply went to the public. The rest is in the hands of the team and investors in is being held by the foundation. 600% inflation in the first 3 years.
• Mysten Labs had investment from bankrupt Alameda Research/FTX. This could mean fall-out risk since this equity will likely be sold due to bankruptcy. Mysten Labs turned out to have sold ~100M in equity to FTX Ventures (8-12-2022). There was also a $1,01M Sui Token Warrant towards FTX Ventures.

Team, Funding and Partners

Team

• Full team can be found [here].
• Mysten Labs (1-8-2022). From this twitter thread by Figment (11-7-2022): "The business was founded by @EvanWeb3, @EmanAbio, @b1ackd0g, @GDanezis, @kostascrypto – all of whom were formerly building Novi or Diem at Meta."
• The Sui Foundation, an unaffiliated foundation, was also established to build the Sui community and fund/support creating products on Sui.
• Evan Cheng; CEO
• Sam Blackshear, Mysten’s co-founder and CTO
• Chief product officer Adeniyi Abiodun and chief scientist George Danezis.
• George Danezis, and Kostas Chalkias

Funding

• Mysten Labs turned out to have sold ~100M in equity to FTX Ventures (8-12-2022). There was also a $1,01M Sui Token Warrant towards FTX Ventures. "It looks like a third of Sui’s$300 million in Q3 funding may have been received within the 90-day clawback date [of FTX's bankrupty]." (12-2022)
• From The Defiant (9-9-2022):

"It has raised $300 million in a Series B funding round that values the company in excess of $2B. The round was led by FTX Ventures with participation from Binance Labs, Coinbase Ventures, a16z crypto, Jump Crypto, Circle Ventures, and other VCs."

All except Binance also invested in competitor Aptos. Making both real VC darlings.

Last December 2021, Mysten Labs raised $36 million Series A funding, led by a16z.

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