Analysis of Sui ecological data and token release

It has been more than 40 days since Sui was launched on May 3. 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 that it will follow in the footsteps of ICP, while others think that it may be similar to the new public chain in 2021.

How is Sui’s ecological development currently? How will the token release and demand be in the near future?

1. On-chain data

1. TVL

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 the public chains and the second layer, the TVL ranks 54th. At its peak, the TVL reached $36.01 million, which is equivalent to a drop of more than 50%.

Compared with another representative project of the move department, Aptos. The current TVL of Aptos is 42.11 million US dollars, the highest has reached about 65 million US dollars since its launch, and the TVL ranking is 34th.

2. Transaction volume

The highest daily trading volume on the DEX on Sui occurred on May 10, exceeding $19 million, and has since declined. Since June, the daily transaction volume has mostly been between 3 million and 6 million, and the transaction volume is relatively low.

3.Activity

Since its launch, the total number of transactions is 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 its launch is 26, which appeared on May 12, which is 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. *

Compared with the TPS of Ethereum L2, at present, Sui's actual TPS is still very low.

From the perspective of daily active addresses, the highest daily active address appeared on May 20, reaching 130,000. The main reason is that Cetus opened the permissionless pool function on May 19, and the meme project carried out airdrops on the entire network. In normal times, the daily active addresses are less than 10,000.

4. Cross-chain bridge

Currently, there are 3 cross-chain bridges that can 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, so it is impossible to know.

2. Ecological projects

As of June 14, a total of 66 projects have been included in sui.directory on Sui's official website. These projects are self-declared and filled by the project party, and many of them are still in testing and have not yet been officially launched.

A brief summary of the projects that have been launched and operated and issued tokens is made. The basic situation is as follows:

Source: coingecko, defillama, LD Capital

It can be seen that most of the ecological projects on Sui did not perform well after they went online. The two projects that are top DEXs have both been broken. The social platform SUIA has fallen by nearly 81.82%. Suipad performed relatively well, mainly because the price was relatively low during IDO, and the FDV was only US$5 million.

The users and funds on Sui are still relatively limited, which caused Abyss World to choose Polygon instead of Sui when the IDO was held from June 1st to 4th.

3. Token Release and Demand

The community is most concerned about the release of Sui tokens. This is a diagram of token distribution and unlocking from token.unlocks, using data from Binance related reports. The total amount of tokens is 10 billion, the initial circulation is 528 million, and the circulation accounts for 5.28%.

From May to October 2023, Sui will have two types of releases, one is the release of tokens previously issued by participating in the exchange IEO, and the other is the release of tokens that are part of the incentives obtained by the pledged nodes.

The IEO price is $0.1 per SUI, and the total number of tokens participating in the IEO is 450 million. 1/13 of them will be unlocked during the public sale, and 1/13 of them will be unlocked every month thereafter, and the unlocking will be completed in 12 months. According to this, about 34.61 million tokens are released every month.

SUI token node pledges can obtain token incentives, and a total of 1 billion tokens are used for node pledge incentives.

In the first 90 epochs (1 epoch=1 day), 1.11 million SUI tokens will be rewarded every day. Thereafter, the reward is reduced by 10% every 90 epochs. There are currently about 7.4 billion SUI tokens pledged in the system, with an average APY of 5.61%. Based on this calculation, the circulation of this part of tokens increased by 33.3 million per month in the first three months after the launch, and increased by 30 million per month in the 4th to 6th months after the launch.

According to this, the IEO release and node pledge incentive release, the first three months were 67.94 million tokens, accounting for 0.67% of the total tokens, equivalent to about 47.55 million US dollars in market value; the fourth to sixth months were 64.61 million tokens, Accounting for 0.64% of the total amount of tokens, the equivalent market value is about 45.22 million US dollars.

Source: suivision

In November 2023, that is, 6 months after Sui goes online, a large amount will be unlocked. Unlocking more than 1 billion coins on the same day will double the circulating tokens.

From the perspective of token demand, according to the above-mentioned data on the chain and the analysis of ecological projects, 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 the move series Aptos to see the similarities and differences of the token release of these two projects.

The total supply of Aptos tokens (excluding the pledge incentive part) is 1 billion, and the initial circulation is 130 million, accounting for 13%. In the first year after the launch, 4.54 million tokens held by the community and foundations will be unlocked every month, accounting for 0.45% of the total tokens, and the equivalent market value is about 28 million US dollars.

Starting from the second year after going online, in addition to the community and foundation releases, the core contributors and investors will also be released every month. From the 13th to the 18th month, 20 million tokens are released every month, accounting for 2% of the total tokens; from the 19th month to the 50th month, 6.75 million tokens are released every month, accounting for 0.67% of the total tokens.

In addition, Aptos also has node pledge incentives. This portion of tokens is not among the 1 billion tokens mentioned at the time of the initial launch. Currently, the maximum reward rate (APY) for network staking is 7%, and the reward rate decreases by 1.5% every year until it reaches 3.25%.

Currently, a total of 860 million APT tokens are being pledged in the network, accounting for nearly 86%. It can be seen that the total supply of tokens is 1.039 billion, and these 39.5 million belong to the additional issuance after node pledge incentives. Aptos has been online for about 8 months, and the monthly pledge incentive is about 4.9 million, accounting for 0.49% of the total tokens.

It can be seen that Sui and Aptos are both low-circulation and high-inflation tokens. However, the initial circulation of SUI is lower than that of APT, which is equivalent to 50% of APT; the number of unlocked tokens per month in the first 6 months is higher, which is 50% higher than that of APT. The first large-scale release of SUI was 6 months after the launch, and 12 months after the launch of APT; 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 the large supply of APT will come in the second year.

V. Conclusion

Judging from the data and ecological projects on the chain, although there are insufficient users and few transactions, it is still in the process of cold start. It needs to attract users and capital inflow through continuous activities and construction.

However, based on Sui’s current operating activities, the team is still paying more attention to the construction of the technical side at this stage, including holding hackathons and holding developer events around the world. User incentives have not yet been activated.

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 to transfer funds from Ethereum to the second layer. Therefore, it has attracted a large amount of on-site funds. Compared with the two, 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 relief pressure of Sui tokens is concentrated in the first year. In the case of insufficient demand, matching such a large supply of tokens has caused SUI tokens to face greater selling pressure.