Original Author: Grayscale Research

Key Points Summary

·Sui is a next-generation blockchain built for scalable applications, aimed at supporting mass-market consumer applications (and other scenarios). Grayscale Research believes that Sui has an outstanding combination of technological advantages and strategic approaches, and is poised to stand out in the competitive Smart Contract Platforms Crypto Sector.

·To attract billions of users, blockchain-based applications must have functionality equal to or even stronger than current Web 2.0 applications. This means requiring high transaction throughput and low usage barriers for mainstream users. Although achieving this is not easy, we believe Sui may possess the right elements to reach this goal.

·Founded by core members of Facebook's (now Meta) Diem blockchain project, Mysten Labs is the core development team behind Sui. Mysten Labs has top-tier technical backgrounds and has adopted an proactive vertical integration development approach, building not only at the blockchain infrastructure layer but also making efforts at the application layer to create a complete technology stack.

·The current market capitalization of Sui's native token SUI is approximately $10 billion [1]. As a project still in its early stages, only 33% of the total supply is currently in circulation; over 50% of the token supply is expected to be released after 2030 [2].

·The SUI token provides investors an opportunity to engage with a next-generation, early-stage blockchain, especially with its potential breakthrough in mainstream consumer applications. Grayscale offers qualified investors a channel to invest in Sui through the Grayscale Sui Trust.

Sui launched in 2023, founded by core members of the Facebook Diem project. During their time at Facebook, these team members' mission was to build a crypto platform that could serve billions of users globally, in other words, they aimed for "global scale" from day one. After leaving Facebook to create Sui, they continued to advance development based on their previous accumulation.

Sui is a next-generation blockchain designed with "usability" and "scalability" as core objectives. Its vision is to provide on-chain ownership and global instant value transfer capabilities while creating a user experience that matches or even surpasses top Web 2.0 tech companies. Therefore, we believe the next "breakout consumer crypto application" is highly likely to emerge from the Sui ecosystem.

SUI is the native token of the Sui network, found in the Grayscale Smart Contract Platforms Crypto Sector. The Sui network primarily competes with Solana, Ethereum Layer 2, and The Open Network (TON) in terms of transaction fee income and market share. In this competitive track, not all projects will succeed. Therefore, each network needs distinctive features to stand out.

Grayscale Research believes Sui may possess a set of differentiated advantages, including:

·Technical Level: Using the Move programming language and a unique blockchain architecture gives Sui natural advantages in scenarios like payments and gaming;

·Team Strength: Team from Facebook, operated by Mysten Labs, with members having deep backgrounds in product, computer science, and cryptography; supported by capital from a16z and Apollo Global;

·Strategic Path: The Mysten team takes a coordinated approach to build a fully decentralized vertical technology stack - developing not only at the blockchain layer but also promoting application layer growth and ecosystem development.

Since the beginning of 2024, SUI has been one of the best-performing assets in the crypto market, outperforming Bitcoin (BTC) and its industry and major competitors: Solana (SOL), Ethereum (ETH), and Avalanche (AVAX) (see Chart 1).

Why Sui Can Stand Out

Every blockchain hopes to achieve "usability" and "scalability" under certain constraints. What makes Sui special is its technological architecture, team, and vertically integrated strategic path.

I. Technology: Blockchain Design and Programming Language

·Blockchain Design: Sui's technological architecture is built for global massive scaling, particularly suitable for high-frequency, low-latency use cases like payments and gaming.

·Predictably Low Transaction Fees: Low costs and stable, predictable fees help reduce user friction and optimize user experience.

·Object-Oriented Model and Parallel Processing: Unlike Ethereum, Solana, and other account-based blockchains that update global smart contract ledgers, Sui uses an object-oriented model. In this mode, each asset is an independent object associated with a wallet, allowing parallel transaction processing. The system only updates relevant objects, not global shared states, thereby reducing computational load, improving efficiency, and achieving higher network scalability.

·"Fast Path" Execution Mechanism: Sui distinguishes between simple asset transfers and complex smart contract invocations [3]. Peer-to-peer simple asset transfers can be executed through the "fast path", achieving near-instant final confirmation [4]. This gives Sui a significant advantage in payment scenarios.

·Horizontal Scalability: Unlike most blockchains, Sui's network capacity can linearly scale with computational power. Sui's validator nodes can improve processing performance by adding servers to meet growing demand. The team states that an 8-fold hardware capacity improvement can bring 8-fold throughput increase without increasing latency [5].

·Programming Language: Sui's Move programming language was initially developed by Mysten Labs team members during their time at Facebook. Move is adapted from Rust, one of the world's most popular programming languages. As a high-level programming language, Move provides strong guarantees for smart contract development, significantly reducing the possibility of common programming errors and vulnerabilities [8]. In comparison, Solidity (Ethereum's programming language) lacks these built-in protections, placing a greater burden on developers to manually implement security best practices.

Due to these features, Sui has the theoretically highest throughput, lowest fees, and fastest confirmation times among the top five market cap smart contract platforms [6] (see Chart 2). As of July 2025, Sui's actual transactions per second (TPS) slightly lags behind Solana, mainly due to ongoing adoption rather than architectural limitations. Therefore, as the ecosystem further adopts the platform, Sui's actual TPS is expected to improve.

II. Team: Top-Tier Entrepreneurs with Deep Experience

Mysten Labs brings together award-winning technical experts in product, computer science, and cryptography, including co-founders:

·Evan Cheng: Mysten CEO, former Facebook/Meta Engineering Director

·Sam Blackshear: Mysten CTO, Move language founder, former Facebook/Meta principal engineer, involved in Diem project

·Adeniyi Abiodun: Mysten Chief Product Officer, previously responsible for Facebook/Meta cryptocurrency-related products, including Diem and Move

·George Danezis: Mysten Chief Scientist, recipient of Computer Laboratory Ring Award

·Kostas Chalkias: Mysten Chief Cryptographer, former Facebook/Meta Chief Cryptographer, three-time winner of best cryptography research paper awards [9]

Mysten Labs has over 100 members, with more than 75 holding doctoral degrees [10]. In our view, what sets Mysten apart is not just its technical background, but its ability to efficiently transform technical expertise into practical products. In comparison, foundational development teams of other networks often take a more academic approach.

III. Strategy: Vertical Integration Development Path

Mysten is not only focused on the blockchain infrastructure layer but also actively participates in the application layer development of Sui, building products, tools, and consumer-grade applications across the entire network. This holistic strategy includes the following key components:

Walrus

Walrus is a decentralized storage solution designed for performance and cost optimization. Unlike centralized storage services such as AWS, decentralized storage eliminates single points of failure and ensures data integrity. Among numerous storage solutions, Walrus stands out with significant appeal. Its unique erasure coding technology dramatically reduces storage costs, saving up to 80% compared to Filecoin and Arweave. [11] Walrus has been used for content storage by mainstream crypto media like Decrypt and Unchained Podcast, and by Plume Network for storing real-world asset (RWA) data. Walrus is inherently scalable, supporting high-throughput, data-intensive applications such as RWA datasets and large language models.

In many ways, Walrus to decentralized storage is like Sui to the blockchain execution layer: it eliminates friction, reduces costs, and opens up new directions for real-world applications. As AI models, video content, and off-chain proofs on Sui continue to grow, Walrus is poised to become the core data infrastructure for Sui network's future growth.

DeepBook

DeepBook is an on-chain Central Limit Order Book (CLOB) deployed on Sui, designed for institutional-level trading. Currently, most DeFi systems rely on Automated Market Maker (AMM) mechanisms. In contrast, DeepBook supports more precise order control, lower slippage, and tighter spreads, better meeting the needs of professional traders and market makers. [12] As a shared liquidity layer for the Sui ecosystem, DeepBook allows multiple DeFi applications to share a unified order book, thereby improving capital efficiency and reducing liquidity fragmentation.

DeepBook currently serves the first and second-largest decentralized exchanges on Sui and has been adopted by multiple lending and derivatives applications. [13] As Sui is adopted by more institutions, we believe DeepBook's trading volume and user base will grow in sync, becoming a key component of Sui's on-chain financial infrastructure and a core driver of its DeFi growth.

Other Components

zkLogin: A patented technology allowing users to register with a single click using Google or Twitch accounts, accessing on-chain applications without a seed phrase;

SuiNS: Sui's decentralized domain name service, similar to Ethereum's ENS or GoDaddy

Ika: An innovative network allowing direct trading of any crypto assets, including Bitcoin and XRP, on Sui without cross-chain bridges or wrapped assets. The Ika token is planned to launch in mid-July

Sui's ecosystem—including the Sui blockchain itself, zkLogin, DeepBook, Walrus, SuiNS, and Ika—collectively form the first fully vertically integrated application suite in the crypto industry.

Although Sui's decentralization is slightly lower compared to other blockchains, for its target market (such as mainstream consumer applications), this might be an advantage. At a stage when Sui is still early (launched only two years ago), the Mysten team is actively launching various products covering broad use cases, significantly lowering development and user adoption barriers. This proactivity will help accelerate adoption and further enhance ecosystem robustness.

Risk Factors Consideration

While some Layer 1 blockchains adopt a "purely decentralized" approach, Sui has taken a more progressive method. Sui currently has a relatively low number of validator nodes and a high staking threshold, therefore its degree of decentralization and resistance to censorship is slightly less compared to more mature networks like Ethereum. In contrast, Sui focuses more on hardware performance and scalability.

Another factor is the strong leadership of Mysten Labs. We believe that in the short term, this is an advantage, as Mysten Labs can prioritize development and quickly deliver applications. However, if the ecosystem does not further decentralize in the long term, it may limit Sui network's scalable market. Additionally, Mysten Labs' deep layout in infrastructure and application layers might create a "competitive squeeze" effect on other developers hoping to build applications in the same track in the short term.

Sui also faces fierce competition in the smart contract platform field. Established players like Ethereum and Solana occupy higher market share and on-chain asset scale. Emerging networks like Monad offer high-throughput alternatives. TON can leverage Telegram's massive user base for distribution. However, we believe that Sui's technical capabilities and Mysten Labs' strategic path can achieve differentiation in certain specific scenarios (such as gaming, trading, and payment), providing lower-latency solutions.

Conclusion

Sui is a next-generation blockchain born for scalability and usability. Its architecture is designed to support consumer-grade applications, featuring low fees, near-instant final confirmation times, and an intuitive user registration process—these are key elements for large-scale user onboarding. Unlike many networks focused on speculative purposes or still struggling with throughput issues, Sui has targeted large-scale implementation from the start, and Mysten Labs has consistently focused on driving the birth of the next "killer application".

Sui's current market value is $10 billion, with most token supply not yet released, indicating the project is still in its early life cycle. But this also means its growth potential has not been fully unleashed. In our view, SUI is a growth investment worth holding firmly, providing a diversified investment exposure to the core proposition of "consumer-grade application onboarding". With its powerful technical foundation, top-tier team Mysten Labs, and vertically integrated development strategy, Sui has a good basis for realizing this vision.

Glossary

Central Limit Order Book (CLOB): A trading system where buyers and sellers place orders with price and time priority, forming a transparent market order book

Smart Contract Platform: A blockchain system that allows developers to deploy automatically executable code (smart contracts), automatically executing rules and transactions without intermediaries.

Throughput: The total number of transactions a system can process in a given time, often used to measure blockchain performance.

TPS (Transactions Per Second): An indicator reflecting blockchain scalability, representing the number of transactions the system can process per second.

Validators: Network participants responsible for verifying and adding new transactions to the blockchain, typically earning rewards through this process.

Automated Market Makers (AMMs): Protocols using algorithms and liquidity pools to achieve on-chain asset trading, replacing traditional order book mechanisms.

Gas Fee/Price: Fees users need to pay to compensate for computational resources required to execute transactions or smart contracts.

Token Burns: The process of permanently removing tokens from circulation, usually used to reduce supply and enhance the value of remaining tokens.

Staking: Locking tokens to support network operations (such as transaction validation), typically earning rewards or yields.

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