Ethereum, one of the world’s most prominent blockchains, known for the development and deployment of smart contracts and decentralized applications (dApps) free of downtime, fraud, centralized control, or interference from third parties, is coming to terms with the rise of a rival new protocol referred to as Sui.
With the mainnet launched on May 3, 2023, Sui is a Layer 1 blockchain like Bitcoin and Ethereum, promising a new standard for decentralized protocols. As an Ethereum challenger, the team behind this relatively new crypto ecosystem believes it has the power to “unlock the freedom to build powerful on-chain assets,” the website states.
Although there have been other crypto protocols (Solana, Cardano, and Algorand) aiming to topple Ethereum’s dominance, especially in the decentralized finance (DeFi) sector, none of them had the backing Sui has of over $300 million.
Deep Pocketed Investors Splash Money on Sui as Valuation Hits $2 Billion
Mysten Labs CEO Evan Cheng, who is also the founder of Sui blockchain, has attracted the attention of investors, some beyond the crypto realm with the promise of “an innovative, decentralized Layer 1 blockchain that redefines asset ownership.”
Sui’s impressive list of backers, which includes the likes of Samsung, Andreesen Horowitz, Franklin Tempeton, and Kevin O’Leary, a renowned Shark Tank investor, saw the company raise $300 million in its August 2022 Series B round, propelling the startup to a $2 billion valuation. According to a Forbes report titled ‘Web3 Meets AI: A Dynamic Duo Transforming User Experience’ “The fully diluted value of the token backing it is now $7 billion.”
Sui – The Ethereum Killer Revolutionizing Crypto Decentralization
Sui brought together developers from Meta and Facebook’s abandoned crypto project Novi to build a new set of decentralized applications that stand out for supporting faster, cheaper, and safer transactions.
The developers built Sui using Move, a programing language based on Rust to guarantee extremely fast transactions, backed by instant processing and scalability, Decrypt reported.
Move aims to streamline smart contract development for developers, paving the way for enhanced accessibility and functionality within the DeFi sector.
— Sui (@SuiNetwork) July 14, 2023
What is Sui?
Sui refers to a novel, first-of-its-kind blockchain and smart contracts ecosystem designed from the ground up to simplify digital asset ownership, making the process fast, private, secure, and above all accessible to the masses.
The same name is also used to refer to the network’s native token SUI, which has since its inception stirred discussion across the cryptosphere. SUI has within a short time grown to $474 million in market capitalization ranking 84th among other crypto assets.
SUI powers the network’s proof-of-stake consensus mechanism, enabling seamless on-chain voting for blockchain upgrades and efficient management of gas fees.
Additionally, SUI empowers users to actively engage in the platform’s decentralized finance (DeFi) activities, providing them with a gateway to participate in a range of financial opportunities within the system.
As a Layer 1 blockchain, Sui like Ethereum provides a foundational platform for secondary decentralized applications, providing support to network validators and transactions.
Layer 1 blockchains like Bitcoin stand out being the fundamental architecture on which crypto tokens execute and enable the deployment of smart contracts for dApps and non-fungible tokens (NFTs), gaming, and social media.
How is Sui Different from Ethereum and Other Layer 1 Blockchains
It is not difficult to realize how Sui distinguishes itself from other Layer 1 blockchains, especially with support for instant transaction finality, coupled with low latency when developers are deploying smart contracts and above all high-speed on-chain transactions.
“Using Sui, you can sell an NFT in half a second, while on Ethereum it takes an average of 12 seconds to post a transaction,” the Forbes report added. “For power blockchain users, that 12-second delay is an eternity.”
Sui claims that it processed at least 297,000 transactions per send in a test environment, however, at the moment the protocol processes only 356 per second. Nonetheless, Sui transactions make Ethereum look like an armature, posting only 15 transactions per second.
Cheng argues that Ethereum’s dominance “is completely wrong,” portrayed as a standard, but in the real sense, it misses the mark in so many ways. The founder opines that institutions pumping capital and other resources into Ethereum are misguided.
“Everybody seems to say, “Oh well, let’s just keep building on top [of Ethereum], because this is where the users are,” Cheng said in the interview with Forbes. “But I see a path to nowhere. I don’t see technology being used for anything at scale.”
When it comes to Sui, network validators are as important as miners are in blockchains like Bitcoin. However, its validation is unlike no other, as it adopts a parallel system for processing transactions. Sui developers believe that this is the foundation required to scale the transaction throughput, reduce latency in smart contracts deployment and boost scalability.
Parallel-process validation system has the potential to revolutionize gaming, retail payments, and physical points of sale with the network. Sui’s horizontal scalability allows the protocol to cater to ever-growing application demands without any upper limits, all while maintaining cost-effectiveness for each transaction.
By sidestepping the need for global consensus on an ordered list of transactions, Sui addresses a significant holdup area prevalent in common in other blockchains, making it a game-changer in the world of decentralized technologies.
Sui developers achieved this impressive scalability feat through a delegated proof-of-stake consensus mechanism, that allows “a new set of token holders picking validators for token staking every 24 hours.”
During each epoch, staked tokens are securely locked, but they retain the flexibility for holders to withdraw or switch to a new delegated validator as the epoch transitions.
“If you have a baseball and get it signed by your favorite player, its characteristics have changed,” Cheng said. “Current blockchains cannot update assets like this in real-time, they have to find hacks around it. It makes no sense.”
Of course, there are downsides to this consensus mechanism, such as the possibility of validators cooperating to break the network due to the more centralized nature of delegated proof of stake.
Sui’s Uses Cases In Web3
The Sui blockchain has recently experienced a surge in network activity, thanks to Sui 8192, a new Web3 game. According to Sui scan, the game saw a massive spike in the number of users, contributing to a commendable increase in blockchain transactions, surpassing 29 million.
In the past 24 hours, the number of transactions on the Sui blockchain exceeded 29 million (transaction blocks), a record high. This growth was mainly driven by a casual game called Sui 8192 launched by Ethos Wallet, which is the first on-chain game on the Sui, and its gameplay…
— Wu Blockchain (@WuBlockchain) July 17, 2023
Sui 8192, built by Ethos, a Sui wallet maker, is expected to revolutionize the Web3 gaming space.
Cheng said in the interview that the network is initially targeting the video gaming industry due to its “immutable real-time blockchain-based updating” which might be indispensable to players “who already devote thousands of dollars and hours to customizing and enhance the capabilities of their avatars in games such as Fortnite and League of Legends.”
Blockchains like Ethereum have failed to impress video game players and developers who do not care for high fees and the prevalent network congestion.
Ethereum continues to struggle with high transaction fees and network congestion despite the transition to a proof-of-stake (PoS) consensus mechanism. Sui’s launch joins other contenders for the top sit in DeFi, which Ethereum has kept for many years.
While it is too early to tell if developers and users will abandon Ethereum in favor of Sui, the new Layer 1 blockchain presents a valid case that there’s a need to have an alternative protocol built from scratch with high-speed transactions, reduced latency, and scalability in mind.
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