What is Sui?
Launching on May 3, 2023, at noon UTC, Sui is a new modular Layer 1 permissionless blockchain by the Sui Foundation. Its architecture divides network activities into separate layers so that varying nodes are responsible for performing specifically dedicated tasks.
Sui utilizes different layers with individual nodes to reach consensus, execute and settle transactions, and make transaction data available to the network so that the blockchain functions efficiently without the risk of congestion. A core value of Sui is decentralization. As a permissionless blockchain, anyone can join the Sui network and participate or contribute to its growth without needing permission from a central authority.
Sui Blockchain Architecture
Sui’s Programmable Transaction Blocks are a powerful tool for developers. They’re different from traditional blockchains because they allow for a sequence of complex and composable transactions. In addition, they can access any public on-chain function across all smart contracts in the network.
These blocks ensure strong guarantees for payment and finance-oriented applications, as chained transactions in a programmable block execute and fail atomically. A series of transactions are performed as a single unit. If any of the transactions fails, then the entire sequence of transactions is rolled back, and no changes are applied to the blockchain. Ensuring the blockchain remains consistent and accurate.
Sui is designed to make everyday, simple transactions like asset transfers, peer-to-peer payments, and NFT minting easy. To maintain high performance, it uses an algorithm called “Byzantine Consistent Broadcast” for parallel transaction submission and execution on a massive scale. Similar recommendations refer to multiple transactions simultaneously, enabling faster processing and increased throughput, resulting in near-instant block finality without reduced security. Sui is capable of validating 297,000 transactions per second.
Sui’s scalability extends to storage, which is low-cost and horizontally scalable. This means developers can define complex assets with rich attributes that live directly on-chain. Witnesses are incentivized to add computing power to increase their performance when needed and reduce it when not. Even with high network traffic, Sui’s tokenomics model keeps gas fees low and stable.
Sui Tokenomics
SUI tokens serve four crucial roles on the network. First, they’re great for staking and earning rewards while helping secure the network. They’re also helpful for paying gas fees to make transactions happen smoothly. On top of that, SUI tokens provide on-chain liquidity, which is essential for ensuring the network runs smoothly.
Also, token holders get to participate in future governance decisions. The total supply of SUI is capped at 10 billion, with over half of that in the Community Reserve, meaning that, like BTC, SUI has a deflationary collection. As a result, the value of SUI should go up over time with adoption as the supply diminishes depending on the token release schedule.
Sui Consensus
Sui utilizes a Delegated Proof of Stake (DPoS) consensus mechanism where validators are elected as witnesses. These witnesses are responsible for validating transactions, which helps the network to run smoothly. Witnesses are elected through a diplomatic process where users with staked tokens can vote to select their preferred witness. The number of votes you can cast depends on the number of tokens you have staked, so the more you have staked, the greater weight your vote carries.
Once elected, witnesses must maintain a high reputation score to keep their position. This score is earned by validating transactions. Witnesses compete to maintain their reputations. A new witness is elected if a witness’s reputation falls below a threshold or network standard.
Witness Rewards
Sui’s DPoS allows witnesses with a high stake to join the consensus process, while token holders can delegate their vote to witnesses. Witnesses receive rewards based on efficiency, as reflected in witness reputation scores—poor performance results in fewer rewards and potential loss of voting power.
Witnesses earn rewards from gas fees and staking subsidies, distributed to token holders who delegate their tokens to that witness’s stake. In addition, witnesses receive rewards based on their percentage of the total stake in the network.
This ensures the interests of SUI token holders and witnesses align, as witnesses who perform poorly receive reduced stake rewards, prompting SUI token holders to move their stakes to better-performing witnesses and incentivizing witnesses to maintain high standards, as they want to retain their stake and earn rewards. The rewards are then distributed to all token holders delegated to that witness’s stake, with a small commission fee paid to the witness manager.
Closing Thoughts
Sui is a promising decentralized smart contract platform designed to prioritize low-latency management of assets. With its permissionless set of authorities and advanced consensus mechanism, Sui ensures the safety of joint operations on purchases, leading to better scalability and increased transaction throughput compared to other blockchain systems.
Using the native asset SUI for gas payments and network operation delegation is just one example of Sui’s innovative approach to creating a more efficient and effective blockchain platform. Sui also aggressively reduces bottlenecks and points of synchronization within authorities, enabling more resources to result in increased capacity. As a result of its advanced design, Sui has a bright future ahead of it.
