Exploring SUI Network’s Solution to Gas Fees
Sui, also known by its market ticker SUI, has come out of nowhere recently and flown into the top 100 crypto projects by market cap.
Having emerged in May 2023, Sui is an apparent groundbreaking layer-1 blockchain that boasts impressive speeds and scalability, processing over 120,000 transactions per second.
Its main objective is to accommodate the vast influx of users in the web3 ecosystem while providing a platform for deploying decentralized applications, more commonly known as dApps.
Ultimately, SUI hopes to grow and rival established smart contract blockchains like Ethereum.
But, does it live up to the hype? Today we find out!
What is Sui Network?
Founded by Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis and Kostas Chalkias, the origins of the Sui blockchain go back to 2021.
This is because all 5 founders are former Meta (nee Facebook) engineers who previously worked for Meta’s Novi division, with Novi being Meta’s digital currency wallet.
After leaving Meta, the group would start Mysten Labs to build and develop the Sui blockchain.
Perhaps impressed by the resumes of its founders, Mysten Labs was backed by Andreessen Horowitz, who invested $36 million into the project in December 2021.
As if not impressive enough, this was followed up by a further $300 million raised during their Series B funding round in 2022.
This announcement was led by a $140 million commitment from FTX Ventures, valuing the startup at $2 billion.
Luckily for SUI, FTX sold back their stake in Mysten Labs and their rights to purchase 890 million SUI tokens not long before the FTX implosion.
Some less controversial funds that also contributed included Jump Crypto, Apollo, Binance Labs, Franklin Templeton, Coinbase Ventures, Circle Ventures, Lightspeed Venture Partners, Sino Global, Dentsu Ventures, Greenoaks Capital, and O’Leary Ventures. But how does Sui work?
How does Sui Network work?
Sui operates as a layer-1 blockchain focused on optimizing speedy blockchain transfers.
It places a high level of importance on immediate transaction finalization, making Sui an ideal platform for on-chain applications such as gaming, decentralized finance, and other real-time use cases.
Sui employs Move, a Rust-based programming language which prioritizes speedy and secure transaction executions for its smart contracts.
By organizing data as distinct entities, Sui nodes can verify independent transactions through a Byzantine fault-tolerant Proof-of-Stake consensus mechanism.
I know you’ve heard me talk about Proof-of-Stake blockchains before, but I will still give a quick recap just in case this is your first article here.
In short, Proof-of-Stake is a consensus mechanism where its users validate the network’s transactions and create new blocks on the blockchain.
Your probability of being chosen as a participant to validate a block and earn rewards is directly proportional to your stake in the network.
This means that the more tokens a participant owns and deposits as a stake, the higher their chances of being selected to validate the next block to the blockchain and receive any associated rewards attached.
The logic here being those with the most invested have the most to lose by cheating the system.
Unlike Bitcoin’s more famous Proof-of-Work, which relies on greater computational power and energy consumption due to the process of mining, Proof-of-Stake offers a more energy-efficient alternative as it doesn’t require half the network to agree, just a validator and some checkers.
However, Proof-of-Stake also incentivizes participants to act honestly by default, as their staked tokens can be slashed or forfeited if they attempt to validate incorrect transactions.
Additionally, the Byzantine fault-tolerance is a mechanism in the blockchain’s code that allows the correct answer to prevail even when several actors are acting dishonestly.
It does this through various redundancy, replication, and cryptographic techniques, with the specifics varying from blockchain to blockchain.
What makes SUI unique?
For Sui to achieve its speed and scalability, SUI uses a technique known as “horizontal scaling” which allows it to create near-instant finalization. But how exactly does that work?
According to their website, Sui scales horizontally to meet increased network demand.
This is Sui’s clever attempt to try and solve the unpredictable gas fee problem, faced by blockchains like Ethereum.
To try and tackle this issue, and keep gas fees at a more stable and predictable price, Sui uses a technique of encouraging validators to add more computer power when needed.
They achieve this by offering the opportunity to earn more in gas fees proportional to how much strain the network is currently under.
Further, Sui believes this technique isn’t just beneficial for transaction processing, they also believe data storage is just as low-cost and scalable if using their horizontal scaling techniques.
But, as we all know, projects live and die by their tokenomics. So, how does Sui compare?
SUI tokenomics
Sui has a capped supply of 10 billion SUI tokens. The main purpose of the SUI token is to secure the network, act as a medium of exchange, and participate in the governance of the blockchain.
As with many modern crypto projects, the belief is that if the project becomes successful, as there is a limited supply of SUI that is critical for using the network’s services, with fewer of them available, it should increase the value for those who already have them.
Of course, this isn’t guaranteed, nor is it particularly unique to this blockchain. However, the logic would likely be true, assuming they were the chosen blockchain of choice over the next coming years.
And, with a reported 120,000 transactions per second, that one day may be the case. Though, naturally, being so new, it is far too early to say with any certainty, as Sui will still need to pass the test of time before reaching that level of success.
In conclusion, Sui is another layer-1 blockchain solution looking to become the digital infrastructure for a decentralized future.
Sui aims to be fast, efficient, and above all, reliable for the incoming world of decentralized finance, in addition to hopefully solving the gas fee nightmare which has haunted other blockchains.
So, will it live up to the hype? No one can say for certain. But for now, Sui still certainly seems interesting and could be one to watch over the coming years