A weekly increase of over 140%. What made Sui?

Author: Clibmer, Golden Finance

Recently, Sui, the project token of L1 public chain Sui, has rebounded from the bottom, with an increase of more than 140% in a week, which is a unique one in the period when altcoins generally fall. Such a brilliant performance has caused heated discussions in the community about the true value of Sui, and the co-founder of crypto venture capital Mechanism Capital and former Goldman Sachs executive and founder of macro research institution Real Vision has published an article to respond to the market value comparison between Sui and SOL.

It can be seen that investors do not want to miss the next public chain project like Ethereum, Solana, and Polygon. This article will also take this opportunity to re-examine Sui and explore the reasons behind the rise of its tokens.

A 140% increase in a single week, outstanding performance gives the community expectations

The name Sui is pronounced swē in English, which comes from the Japanese word for the water element.

In March 2022, Mysten Labs, a Web3 infrastructure startup founded by four former Meta engineers, announced its Layer 1 public chain called "Sui". Mysten Labs said Sui is a permissionless proof-of-stake (PoS) blockchain network with no theoretical limit on throughput per second. The network will also support smart contract development through the Move programming language, allowing developers to build decentralized applications on Sui.

Sui is designed to achieve horizontal scalability and can support diverse DApp development at high speed and low cost. Its goal is to deploy decentralized applications (DApps) through a smart contract architecture that is superior to blockchain competitors such as Ethereum, in order to "lead the next billion users to Web 3." The development team of the public chain Sui and the Web 3 infrastructure company Mysten Labs also raised a total of US$336 million in 2021 and 2022, with a post-investment valuation of more than US$2 billion at that time. Investors include a16z Crypto, Jump Crypto, Binance Labs, Franklin Templeton, Coinbase Ventures and other well-known institutions. In May 2023, Sui was officially launched on the exchange, and the project token has since fallen to around US$0.37. However, with the advent of a new round of bull market, Sui has also ushered in a wave of outbreaks, and rose to a historical high of US$2 at the end of March this year, an increase of about 440% from the lowest point. However, it soon fell all the way as the crypto market cooled down, falling to as low as $0.46, a drop of 77%. Therefore, its overall return performance is average among similar projects in terms of the rise and fall.

However, Sui's recent increase has been quite explosive.

From the price trend of Sui on CoinMarketcap, it can be seen that Sui's price reached a stage low of $0.46 on August 5, and then it rose sharply, and rose to a stage high of $1.12 on August 12. In just one week, Sui's increase was as high as 143%.

This increase not only ranks first among similar projects, but also ranks among the best in the current situation where altcoins generally fall sharply. At the same time, this performance has also attracted heated discussions in the community, and some people even regard it as the next Solana killer.

Community member @apadinbase said that he bought Sui at the bottom of $0.57, and he was also surprised by such a big increase. Previously, he thought Sui was like SOL in 2021, and also said that ui capital would promote itself as a Solana killer in order to pursue profits.

In response to such views, Andrew Kang, co-founder and partner of crypto venture capital firm Mechanism Capital, said he did not think Sui's market value would reach the level of SOL. Raoul Pal, former Goldman Sachs executive and founder of macro research firm Real Vision, also said that if Sui wants to prove that it deserves to be the next big hit, it needs to effectively compare with SOL by breaking the downward trend.

Behind the rise: internal and external factors work together

For Sui's rise, Andrew Kang, co-founder of MechanismCapital, was the first to give his own insights and said that Sui has shown multiple bullish signals. Kang listed five reasons to support this prediction: 1. RaoulPal, who serves as a member of the advisory board, published a series of posts in support of Sui; 2. There is a large demand for over-the-counter transactions in the market; 3. Despite the large-scale unlocking, holders remain relatively strong; 4. Sui's price trend is positive and there has been no callback; 5. The recent Mysiceti performance upgrade may bring interesting new applications. In my opinion, Sui's sudden outbreak is the result of the joint efforts of multiple internal and external factors. First of all, Sui is positioned as the Web3 basic layer, and is also committed to building the underlying infrastructure of encrypted games. Sui's TVL has been growing continuously since October last year, and the current figure is about 633 million US dollars. Its project ecosystem has reached 86, and projects with TVL exceeding 10 million account for nearly 10%.

On the other hand, Sui project parties have been active. In early August, Mysten Labs announced the launch of a new consensus engine, Mysticeti, which can reduce the latency of Sui blockchain to a certain extent; in July, Sui integrated the blockchain node runner of Amazon Web Services; in June, Sui reached a cooperation with the hosting service provider Copper.

From the perspective of time, the direct reason for Sui's recent rise is the overall recovery of the crypto market and the rise in BTC prices. On August 8, BTC rose by about 12% throughout the day, and Sui rose to $0.86 on the same day, an increase of about 40%. Since then, the market has fluctuated slightly, but Sui has continued to rise.

In addition, Sui's continued rise was also indirectly affected by the community's calls and the bullish remarks of MechanismCapital co-founder Andrew Kang. After his remarks were made on the morning of August 12, Sui rose to a staged high of around $1.117 in the afternoon and evening of the same day. Since then, it has been adjusted back. As of the time of writing, Sui's price is $0.93.

In terms of news, the biggest positive is the crypto investment trust service launched by Grayscale for Sui on August 7. As of August 14, Grayscale Sui Trust's asset management scale (AUM) exceeded US$650,000, and the net asset value per share rose to nearly US$15.

Bitget Research Institute also issued a statement saying that before the sharp rise, Sui's open interest began to rise from a low level, indicating that hot money was pouring in.

In addition, on July 8, OKX and Sui launched a learn-while-earn activity, which indirectly increased the influence and liquidity of the Sui project.

The above are all post-event positive effects summarized after Sui's rise, and cannot be the direct factor for Sui's outbreak, but the project has also had other positive events recently. For example, on August 13, CoinList launched a pledge fund, and the first batch of five crypto assets supported included Sui, and it will also provide digital asset passive income services to US accredited investors.

In addition, ZAN, a Web3 brand under Ant Digital, announced a partnership with Mysten Labs. ZAN will provide technical support for Mysten Labs' KYC infrastructure and RPC node services. In the first quarter of last year, Mysten Labs announced cooperation with Alibaba Cloud and Tencent Cloud.

Conclusion

It is normal for a project to soar or plummet in the short term in the crypto market. What is really worth paying attention to is whether the project itself has long-term value. Just like Ethereum, Solana, and Toncoin, it has both market heat and moats. Judging from Sui's current performance, it does give investors hope at a time when blue-chip altcoins are generally sluggish, but it is too early to regard it as a Solana killer. Therefore, as a former Goldman Sachs executive said, it is only possible to compare with SOL when Sui completely breaks the downward trend.