Sui ecosystem is evolving towards DeFi, with great potential in gaming and social sectors.
We are excited to announce the launch of Sui application activities on the Artemis platform. We believe that it is crucial for investors to explore the Sui platform and its on-chain activities. In this research article, we will introduce the unique features of the Sui blockchain, the economic prospects of SUI tokens, and explain how investors can understand which dApps are driving on-chain usage through Sui application activities.
Sui is a Layer-1 blockchain based on Proof-of-Stake, with innovative features such as object data model, zkLogin, and smarter contracts written in Move language for enhanced security.
The total supply of Sui tokens is 10 billion, released to investors, Mysten Labs team, and community projects over time in the form of staking rewards and pre-mining unlock. Sui can be staked on-chain, unstaked at any time, and staking rewards are distributed at the end of each epoch.
Sui’s scalability is highly efficient due to its object data model allowing large-scale transaction parallelization, ensuring stable gas prices as usage increases.
In the previous quarter, Sui’s ecosystem witnessed significant adoption, with TVL (Total Value Locked) increasing by 240% and DEX trading volume increasing by 407%.
The Sui Foundation is heavily investing in community-building activities, such as Sui Overflow, a global hackathon with over $1 million in prizes, and Sui Basecamp, a conference attended by top industry participants from Binance, Messari, and a16z.
Sui application activities have just launched on Artemis, providing real-time analysis of metrics, on-chain activities, and performance.
Exploring Sui and its user behavior often requires extensive research and experimentation. The good news is that Sui application activities can make exploring on-chain activities more efficient and organized, allowing investors to analyze real-time trends and user activities. Let’s take a look at the activities on Sui.
By analyzing the transaction distribution over the past three months, we noticed a surge in user transaction volume in early May 2024, led by Spam transactions. To understand which dApps within Spam are responsible for the high activity on Sui, we delved into the segmentation table.
Spam is dominated by a unique dApp: Spam Sui.
Spam Sui is a community-driven stress test developed by Polymedia, where users earn SPAM tokens by sending transactions on the Sui network. Spam Sui successfully achieved its goal, with a total transaction volume growth of 1134% in the week before and after its launch.
With the presence of Spam Sui, Sui’s daily transaction volume even surpassed Solana for three days, showcasing its capacity to handle traffic far beyond its L1 competitors. In early June, Sui processed ~8 million transactions per day.
Another dApp on Sui recently of interest to users is Wave Wallet, a Sui wallet based on Telegram with its native token $OCEAN. Wave Wallet has shown rapid growth in active addresses and submitted transaction volume. The active addresses grew significantly, reaching 163,600 on May 12, a 265% increase from a week ago and a 3,618% increase from two weeks ago. Transactions submitted using Wave Wallet also showed similar growth, with a weekly increase of 258%, totaling 3.5 million transactions. These transactions mainly involve users mining $OCEAN by playing the game in the Telegram wallet.
From recent trends, it is evident that most Sui transactions in the past three months have come from users bridging to Sui through Wormhole. Wormhole is an interoperability protocol compatible among more than 17 blockchains. In the first quarter of 2024, the net flow of bridged assets on Sui reached $423.7 million involving 59.9 million transactions through 1,100 active addresses, marking a 432% increase in asset transfer value from the fourth quarter of 2023.
By examining the ecosystem traffic on the Artemis platform, another impressive metric is revealed: in the past three months, the number of assets bridged to Sui through Wormhole from Ethereum exceeded that from any other blockchain.
With the increasing popularity of DeFi on Sui, liquidity is being transferred to Sui, leading to a rise in DeFi usage.
In the first quarter of 2024, Sui’s DEX trading volume reached $7.1 billion, a 407% increase from the previous period. TVL reached $724 million, growing by 240%.
By analyzing the DeFi sector in Sui’s Application Activity, sorting by Gas (USD) expenditure provides a better understanding of specific transaction details for DeFi users. The data shows a 122% increase in Gas fees so far this year, reaching $81,975.80, with a significant portion spent on DeepBook.
DeepBook is one of Sui’s native standards, offering basic functionalities and frameworks on the Sui blockchain that dApps can utilize or extend. It serves as the native liquidity layer on Sui in the form of Central Limit Order Book (CLOB). While it lacks a built-in user interface, Cetus recently released an interface on its decentralized exchange platform. Gas fees on DeepBook have risen by 78% this year as more independent DeFi protocols and MEV bots leverage its CLOB to access liquidity.
As shown in the table, Gas expenditures for Scallop and NAVI, the two DeFi protocols, are an order of magnitude higher than other protocols on Sui. Let’s dive deeper into them.
Scallop is a lending protocol built on Sui. They were the first project to receive a grant from the Sui Foundation, known for their reliable security, and recently launched their native governance token $SCA. With more liquidity flowing into the Sui platform, a significant portion has gone to Scallop, increasing its TVL to $1.21 billion, a 256% growth since the beginning of the year. Scallop currently runs bi-weekly incentive programs, rewarding lenders and borrowers with Sui to attract users and liquidity. The bi-weekly incentive program starting from May 13th provided 251,000 Sui to suppliers and borrowers for higher yields. The incentives vary between each bi-weekly period.
NAVI is another DeFi platform built on Sui, offering lending and liquidity staking services. They recently launched their governance token $NAVX. Unlike Scallop, NAVI has laid out a roadmap for 2024, planning to expand operations to more chains. The TVL of the NAVI protocol reached $1.49 billion, growing by 366% since the beginning of the year. They also run bi-weekly incentive programs. For example, the program starting from May 13th offered up to 23.99% APY for suppliers.
Where there is DeFi, there is MEV. Sui is no exception, with MEV bot Gas expenditures growing by 1,905% so far this year, surpassing 22% of the DeFi industry during the same period. As MEV smart contracts call DeFi protocol contracts, there is some double-counting involved, but it also indicates that a significant portion of DeFi activities actually originate from MEV bots.
Considering the widespread adoption of DeFi on Sui, it is essential to note that smart contracts on Sui are written in Move. Move is a Rust-based programming language developed by Meta and extended by Mysten Labs, known for its higher security and reliability compared to Solidity. Recent hacking incidents, such as the theft of $197 million from Euler Finance or $54.7 million from KyberSwap, may prompt DeFi protocol founders and users to seek more secure and reliable smart contracts written in Move on Sui.
The lower gas fees and efficient transaction capabilities of Sui provide a conducive environment for the development of games. Sponsor transactions, where one Sui address pays gas fees for another transaction address, enable users to interact with games on-chain without pre-funding. However, the gaming industry is still in its early stages, accounting for only 3% of the Sui ecosystem in the fourth quarter of 2023, decreasing to below 0.1% in each subsequent quarter.
Although activity is relatively low, two platforms have dominated this sector this year.
The first is Arcade Champion developed by Blue Jay Games, a mobile arcade-style game using a “play-to-own” model where players can obtain “heroes” – NFTs that can be traded or sold directly on Sui within the game. The game has a 4.8-star rating on the App Store with over 170 reviews. While it spent approximately $10,300 on gas fees in the fourth quarter of 2023, its activity seems to be slowing down with a quarterly decrease of 96% due to the rapid development of DeFi.
The second platform is the on-chain betting games from DeSuiLabs, such as Sui Coin Flip, with a transaction volume exceeding $20 million. In the fourth quarter of 2023, users spent $1,200 on gas fees for DeSuiLabs games, experiencing a 93% quarterly decrease. DeSuiLabs does not offer sponsored transactions.
It is expected that more games will be released in the gaming sector of Sui by the second half of 2024. Notable announcements on Sui Basecamp include Ambrus Studio’s E4C: Final Salvation and NDUS Interactive’s Xociety. The mobile gaming device based on Sui, SuiPlay0X1, also announced an expected release date in 2025.
Sui also announced Sui Overflow, the first global hackathon with prizes exceeding $1,000,000. This is sure to attract students, developers, and founders from around the world to join the Sui chain, including those who may not have had prior experience or interest in building on Sui.
The recent Sui Basecamp conference showed that Sui is making coordinated efforts to attract more newcomers to its ecosystem and promote the development of the existing community. According to the conference website, over 1,200 people attended the conference, including speakers from Messari, Binance, a16z, Aftermath Finance, and Mysten Labs.
Sui is heavily investing in its community development and gaining recognition from top industry participants.
In conclusion, Sui is a PoS L1 blockchain with a novel architecture aimed at bringing the next billion users into Web3. Its object-centric model achieves transaction parallelization through validator horizontal scaling. While the Sui ecosystem is evolving towards DeFi, it also holds great potential in gaming and social sectors due to its low gas fees, sponsored transactions, high transaction capacity, and zkLogin. The fixed supply of 10 billion Sui tokens is released in the form of staking rewards and pre-mining unlock for private investors, Mysten Labs team, and community projects. The Sui Foundation is strengthening community development plans, including DeFi incentives, Sui Overflow hackathon, and Sui Basecamp conference. Of course, utilizing Sui Application Activity on Artemis is a good way to monitor and analyze real-time Sui chain activities.
Tags
2023 Market
Base
DeFi
DEX
Scallop
Sui
Gaming
Social
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Note: The content is for informational purposes only and does not constitute investment advice.
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