Observing the current state of the Sui ecosystem from multiple perspectives

Author: Vincent @thecryptoskanda; Xuan twitter:@lvxuan147

Sui’s official website has been online for almost a month. Apart from the boring dispute with the ETH Maxi, as the flagship project of the public chain based on the Move language and the most anticipated Non-EVM Layer1 public chain, Sui has received a lot of criticism from public opinion.

As a long-term observer and ecological investor of Sui, I believe that we have a responsibility to honestly discuss what has happened to the Sui ecology. This article will discuss the current situation of the Sui ecology from the perspectives of data, applications, and events.

Sui’s on-chain fundamentals
Progress of Sui’s ecology
Suggestions for the current stage of Sui ecology

01, The on-chain fundamental situation of Sui

1. Total liquidity of assets

TVL – The current on-chain TVL of Sui is $19.02m, and the peak in the past month was $36m.

The largest on-chain application of TVL is the decentralized exchange Cetus, which currently accounts for more than 65%, followed by Turbos. More than 60% of the composition of TVL is stablecoins (such as USDT/USDC).

(source: DeFillama)

Trading volume – The 7-day trading volume of Sui is at least $32.37m, ranking 20th among all chains. The main on-chain transaction volume occurs on Cetus.

2. On-chain activity of Sui

The current on-chain activity of Sui (7 days) total number of transactions: 1,129,884 total number of objects (including smart contracts, tokens, NFTs, etc.): over 8.3 million number of daily active addresses: 22,000 total number of active addresses: 570,000

If Artemis’ statistical method is used, that is, the number of unique wallets that have traded in the past 24 hours is compared with Solana and Aptos, which are also non-EVM chains, the number is even lower:

From the trend, the on-chain activity of Sui has been decreasing in the past week. It is worth noting that since the launch of the Sui mainnet, on-chain activity has fluctuated with the IDO of several major ecological projects and DeFi activities.

Recent major events related to the peak of active addresses in Sui:

– 5.10 Cetus IDO

– 5.12 Turbos IDO

– 5.15 Suia IDO

– 5.19 Cetus opened non-permissioned pool function, meme project conducted airdrops across the network

3. $Sui Liquidity Situation

As the native token and main reserve asset of the Sui network, in the absence of on-chain native stablecoins, the liquidity of $Sui largely determines the on-chain asset liquidity of Sui. We will not discuss the future unlocking situation of $Sui here, only the current circulation status.

Sui adopts the DPOS consensus mechanism, and $Sui is currently delegated to 104 pledged nodes to obtain a fixed $Sui pledge reward. The current circulation of $Sui is about 528 million, and $Sui pledged is 7.29 billion. Although the circulation in terms of US dollars exceeds 500 million US dollars, this is not reflected in TVL, and the gap is very large.

This actual situation of insufficient on-chain liquidity, although contrary to many people’s stereotypes, was evidenced in several previous IDOs. The over-subscription of Cetus and SUIA ID resulted in 135 times and 18 times respectively, which directly caused the $Sui lending pools in OKX and Binance to be almost exhausted, accounting for 1/5 of the total supply of $Sui.

The reason for this is that by observing the current $Sui holding data, we can see that almost all of the circulation (including most $Sui node pledge rewards) is currently in a non-pledged state. The largest of these holders we estimate to be centralized exchanges (accounting for more than 4% in total). That is to say, only a very small part of $Sui is used for on-chain activities.

Node staking can be thought of as a risk-free rate of return on the chain (similar to US Treasuries). Currently, the average rate of return on Sui is less than 6%, which is obviously unattractive to investors for a token that has not yet been massively unlocked. At the same time, because there is no LST solution yet, Sui cannot be used as collateral to return to the Sui chain and leveraged to achieve higher yield returns, which further explains why most $Sui choose to stay on centralized exchanges.

4. Cross-Chain Bridge

Currently, only the Wormhole cross-chain bridge is available for Sui, which supports more than 10 types of assets and 7 chains including ETH, BNB, and Polygon.

As Sui’s cross-chain USDC, USDT, and other anchored assets do not use the object format recommended by the Sui official, the totalSupply field in the TreasuryCap cannot be read. Therefore, the stablecoin trading volume and minting volume of this cross-chain bridge on Sui have not been disclosed for the time being. The native USDC and USDT tokens of ETH and SOL can be found at the anchor address of Sui here.

Currently, only two sets of small token cross-chain minting data were found through research, namely WFTM with a minting volume of 1949.96442242 and WAVAX with a minting volume of 31.64116756.

02. Sui Ecology

1. Who is Carrying Data on the Sui Ecology Chain

Dex: Cetus

Cetus is the middle pillar of the DeFi ecology on Sui, and even the entire Sui ecological chain. Regardless of TVL or transaction volume, it almost occupies an absolute dominant position. But this state is not healthy for the entire Sui chain.

Yield Farming: Mole

Mole is a revenue aggregator based on Sui and Aptos, which supports both single and dual pool modes, and has a leveraged mining function similar to AlBlockingca on BNB Chain. The current TVL is $180,000.

NFT Trading Markets: Souffl3/Clutchy

Souffl3 is an NFT trading market on Aptos and Sui, which supports both 0 royalties and two launch methods, LaunchBlockingd and Free mint, and has a mini task module Bake Off.

Cluthy.io is an NFT and game market on Sui. It has a very strong IP reserve, including the Fuddies NFT, which was first launched on Cluthy. In the early stage, a large number of NFT players made Sui NFTs known to the Twitter community through Cluthy’s social sharing function. Cluthy also has a small game platform similar to 4399, but the current amount of play is not large.

NFT Collection: Fuddies

Sui’s silly bird NFT is known as the “BAYC” of the Sui community, with a total transaction volume of 1.44M $Sui (Clutchy.io data) and the highest Twitter avatar rate of any Sui NFT on the entire network. In a sense, it is one of the most representative Sui circles of the moment.

GameFi: Abyss World

Abyss World is a soul-like ARPG game, and its developer has just completed a financing round with a valuation of 100 million yuan. The early PR and activities were well done and received a lot of attention. It can be said that it is the most well-known Sui ecological game in the industry.

However, Abyss World chose to conduct its IDO on Polygon and settle all game-related assets in Sui.

2. Traffic Entry Point

Wallets and activity platforms are the main entry points for on-chain activity traffic. Currently, the wallets that support the Sui ecosystem are:

Browser Wallets:

1. Sui (https://shorturl.at/sBJ02)

2. Suiet (Suiet.app)

3. Martian (martianwallet.xyz/)

4. Ethos (ethoswallet.xyz/)

5. OKX Wallet (www.okx.com/web3)

6. Surf Wallet (surf.tech)

Mobile Wallets:

Glass（https://glasswallet.app/)

Currently supports iOS and Android downloads, but there are few dAPPs that support this wallet.

Bitkeep（https://bitkeep.com/）

It has supported Sui wallet and dAPP usage.

OKX（https://www.okx.com/web3）

It supports Sui wallet and $Sui assets, but it does not yet support adding other assets on Sui, and the browser does not yet support Sui dAPPs.

Activity platform

Port3

Port3 is a multi-chain activity platform that supports Sui and other chains, and supports both on-chain and off-chain tasks. Users can link their Web2 social platform identity and Web3 wallet to complete related tasks and receive rewards.

Suia

Suia is an activity NFT and social platform based on Sui. Users can mint various activity commemorative NFTs on Suia and track project-related NFT activities.

03, Suggestions for the current stage of the Sui ecosystem

In the current market and liquidity environment, the challenges faced by the Sui ecosystem can be expected, mainly: the number of mainnet projects of the ecosystem is relatively low, and the market performance of the main IDO projects in the early stage is poor, and necessary infrastructure is not perfect.

Of course, ecological construction takes time and cannot be accomplished overnight, and the market environment cannot be changed. The poor public opinion in the early stage is already a fact… However, Mysten Labs and Sui Foundation still have plenty of room for rapid improvement:

1. Reduce the validator threshold, open and propose liquidity staking (LST) scheme

Sui currently has 104 validators. The threshold for new validators is not the device, but the need for a 30m $Sui pledge. This has actually formed a high centralization of $Sui, which is not conducive to competition between nodes.

Secondly, the current staking plan of 6% pledge APY is not attractive enough for community users, and it is also unable to use the pledging tokens as collateral to leverage on the chain. Therefore, the vast majority of $Sui is left on centralized exchanges. This has led to a severe lack of on-chain asset liquidity, and $Sui’s reserve consensus is in a dilemma of insufficient consensus.

In fact, liquidity staking can solve this problem well. The Ethereum ecosystem has already crossed the river by feeling the stones and added a lot of liquidity and innovative scenarios to the ecology without increasing the pledge APY to cause greater token selling pressure. From the perspective of development stage, Sui is far from worrying about “consensus overload” like Ethereum, and it should use all means to enhance reserve consensus at present.

2. Increase cross-chain facilities

Cross-chain assets are the most important part of on-chain assets. Whether you like it or not, cross-chain bridges are currently the key facilities that cannot be replaced. The consensus degree of a chain is directly proportional to the number of cross-chain bridges. More cross-chain bridges mean at least more arbitrage opportunities, more trading volume, and more users, and finally get stronger consensus. This advantage is particularly evident for low-rate and high-speed chains like Sui.

Wormhole, as a long-standing and reliable cross-chain bridge supported by Jump, is worth trusting. However, in actual use, Wormhole cannot provide the same native assets and liquidity for “visitors” from each chain, and it is difficult to guarantee that transactions will not be stuck on the chain. Therefore, is it a better choice to encourage and introduce multiple cross-chain bridges of different types?

3. Support native stablecoins

Even with more cross-chain facilities introduced, native stablecoins are still the key to trading prosperity on the chain. It reduces the user’s reserve threshold and the anxiety caused by cross-chain, and is also the basis for the expansion of the on-chain asset-liability table. From ETH to BNB to Solana, history has proven that native stablecoins play a crucial role in the expansion of the public chain ecology from the initial stage to the sustainability in the later stage.

Before Sui, the pioneers of stablecoins had already made various attempts. It’s time to take advantage of the after-effects of Sui and form a stablecoin team that unites various DeFi protocols, has a clear credit expansion path, and continues to expand use cases, which is urgently needed to solve the liquidity problem in the ecology.

4. Accelerate support for mobile wallets

Sui’s core vision is to bridge more Web2 users to Web3. Obviously, more users, especially young users, are absolute supporters of “mobile-first”. However, as you can see from the summary of my previous article, there are very few mobile wallets available for Sui. You can imagine the frustration of having to export private keys one by one to use Martian on a laptop when I established 20 addresses in OKX wallet to participate in Cetus. Not to mention users who didn’t even know what crypto was before Sui.

Therefore, we urgently need available and easy-to-use Sui mobile wallet products for iOS and Android. dAPP teams can also consider more integration with already available mobile wallets, or further, a middleware team that can provide a connection standard similar to WalletConnect or various wallet API integrations can come forward.

5. Improvement of data visualization

Although I hate to say this, Sui’s current on-chain data visualization is one of the roughest I have seen. The main browsing tools: Suiscan, Sui Explorer, SuiVision, most of which cannot even intuitively provide the total supply of objects such as Coin and NFT.

I know that Sui uses UTXO instead of EVM, but this is not a reason to make the data invisible. Secondary market participants already have a very complete and smooth data tool experience in the EVM ecosystem, and the above data is one of the most important indicators for them to participate in the market. What we need to consider is whether it is not the case to improve and surpass our opponents, and to give users an unprecedented smooth experience?

And there is still a lot of work to be done by the Dapp team. Why doesn’t DappRadar provide a Sui dAPP dashboard yet? Why have the launched DeFi projects still not completed the TVL and Volume data access to DeFillama? Why can’t Portal Bridge provide transaction data and minting volume for Sui cross-chain bridges? These are all very important parameters for operations and marketing. Without data, I can’t even write more threads to promote the SUI ecosystem.

6. Let It Ride

As a participant in the Sui ecosystem, Sui is a very hardworking, engineer-centric, and Asian-developer-friendly public chain team. They leave more infrastructure engineering-related work to themselves rather than throwing it to the community and allowing the problem to spread. However, this attitude is a double-edged sword. On the one hand, it gives developers higher density technical support; on the other hand, it forms a kind of “metanarrative” in a factual sense. In the long run, there is a risk of being considered “unorthodox” in development that is unrelated to the “metanarrative,” which can marginalize developers with crazy ideas, lead to loss to other ecosystems, and result in insufficient innovation. At EDCON by Bodego Richard, the Ethereum community has already been observed to have encountered such a bottleneck, and Vitalik even had to re-discuss what “orthodoxy” is. Such experiences need to be learned from to avoid being repeated.

As meme community enthusiasts often say, let it ride, let developers play freely, the ecosystem will thrive, and flowers often grow out of the weeds.

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