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Sui TVL Soars, Which DeFi Projects Should You Pay Attention To?

2024-02-07
Sui TVL Soars, Which DeFi Projects Should You Pay Attention To? image 0
Sui is a Layer 1 blockchain developed by Mysten Labs that aims to host general purpose applications while optimizing for security, scalability, and sustainability. Since mainnet launch in May 2023, the Sui blockchain achieved a milestone on January 27th by amassing over
$402 million in Total Value Locked (TVL) and ranking in the Top 10 chains by TVL, according to @DefiLlama. This event underscores the growing name of the Sui blockchain. As of the time of writing, the SUI token price is $1.51.
 
 

Reasons Behind SUI Price Rally: High Rewards and Sui Event Debut

SUI token's recent price surge can be attributed to many market-wide and chain-specific factors, but primarily due to two key considerations. Firstly, the APY reward for supplying SUI to major lending protocols has been over 20% APY, creating strong incentives for locking up SUI to earn yields. This reduced circulating supply and increased demand, consequently driving up the price. Secondly, Sui recently announced that its inaugural ecosystem conference, Sui Basecamp, will take place in April 2024 in Paris, France. This event generates hype and attention around Sui's growing user community, guiding investors to believe in Sui's long-term potential. Between lucrative rewards and bullish expectations, SUI price embarked on an upside move.
 

What Sets Sui Apart: An Innovative Chain in the Web3 Landscape

Sui's creativity stands out when compared against other prominent blockchain ecosystems. Sui adopts a pioneering "object-centric" architecture, a departure from the account-based architecture found in blockchains like Ethereum. Expressed via the Move programming language, Sui's abstraction and composability of assets enhance smart contract security and developer productivity. Moreover, Sui boasts greater scalability than other Layer 1 blockchains because the former uses "parallel execution". In fact, Sui hit 270,000 transactions per second (TPS) just two months ago in December 2023. Other notable features also underscore Sui's user-friendly nature:
  • zkLogin: Sui allows users to create on-chain accounts using web2 providers such as Google, GitHub, and Apple, lowering the barrier-to-entry of inexperienced web2 users.
  • Sponsored Transactions: Sui allows dApps to play the role of "gas stations" that sponsor and pay for its users’ gas fees, further smoothing the process of interacting in the web3 world.
 

Parallel vs. Sequential Execution: Why Sui Does it Better

Parallel execution refers to the ability to process multiple transactions concurrently on a blockchain network. With this novel execution scheme, transactions are split across multiple processors, resulting in more transactions being processed per second and latency being significantly lowered. Since payments are no longer lining up or blocking each other, parallel execution networks can handle usage spikes much more effortlessly than sequential execution models. Take Ethereum as an example: whereas the EVM can only process 20-30 transactions per second, Sui can process upwards of 200,000. As the pace of web3 mass adoption accelerates, it becomes more and more apparent that parallel execution chains will be indispensable for accommodating the explosion of demand.
 

What are the Top DeFi Protocols on the Sui Ecosystem?

Scallop Lend

Scallop Lend offers a suite of DeFi services including lending, borrowing, asset management, and automated market making (AMM) all on a single platform. Scallop has experienced massive adoption since launching on Sui's mainnet, with total value locked recently surging to $88 million to become the top DeFi app on the Sui network. Scallop's rapid growth mirrors Sui's ability to support cutting-edge DeFi innovations.
So far, Scallop has facilitated over $4.2 billion in cumulative lending and borrowing volume and $205 million in flash loans. It provides high interest rates for lenders along with low fees for borrowers, as well as developer tools like SDKs and sCoins for zero-cost flash loans. Scallop is also distributing its native SCA token to reward early adopters.
 

Cetus Protocol

Cetus Protocol is building a decentralized exchange (DEX) on the Sui and Aptos blockchains with the mission of providing "Liquidity as a Service" through its concentrated liquidity market maker (CLMM). In addition to enabling complex trading strategies for users, Cetus also embraces composability, allowing developers to readily build products such as liquidity vaults, leverage farming, and derivatives on top of Cetus.
As the only DeFi protocol among Sui ecosystem's top 3 that has launched a native token, Cetus Protocol and CETUS are worth paying attention to in 2024. In terms of tokenomics, Cetus utilizes a two-token model of CETUS and xCETUS to incentivize active participation through protocol earnings.
 

NAVI Protocol

NAVI Protocol offers over-collateralized lending and borrowing services using SUI, USDC, USDT, wETH and wBTC. The protocol prides itself in innovative features like Automatic Leverage Vaults and Isolation Mode, which let users leverage their assets and deploy new trading strategies while minimizing risks.
So far, NAVI Protocol's total value locked (TVL) has exceeded $116 million USD, with borrowed assets reaching $43 million USD.
 

KriyaDEX

KriyaDEX is an exciting new decentralized exchange built on the Sui blockchain. As a non-custodial orderbook-based DEX, KriyaDEX allows users to trade perpetual and options contracts in a secure, peer-to-peer manner. All order matching happens on-chain for full transparency.
Kriya's current offerings include an in-app bridge, an AMM swap, and a fully on-chain orderbook for 20x perp trading. According to KriyaDEX on X on Jan 19, "200,000 $KRIYA will be distributed over 20 days, and a reward pool of 10,000 $KRIYA will be shared every day amongst top traders by volume," which may be a sign that KrriyaDEX intends on launching its native token soon.
 

How Can You Safely Use DApps on the Sui (SUI) Network?

Wallet security is always a major concern of DeFi users as they navigate around multiple protocols. Bitget Wallet can help you with securely connecting to Sui's rich DApp ecosystem. Take NAVI as an example, simply:
  1. Go to the Bitget Wallet "Discover" page and find the "Sui" tab.
  2. Tap "NAVI" to be securely directed to this DApps's website.
  3. Now you can explore the functionalities of NAVI with only a few clicks within your wallet!
Bitget Wallet is a versatile web3 crypto wallet supporting over 100 mainnets and 250,000+ cryptocurrencies, including Sui and its native token SUI. A Sui (SUI) wallet in Bitget Wallet allows you to send, receive and manage Sui crypto assets. Moreover, Bitget Wallet supports various DApps across multiple networks, you can interact with most of Sui ecosystem’s main projects via our Discover page.
 

Conclusion: What to Expect of Sui In This Bull Market?

Since its launch in May 2023, Sui has been eagerly anticipated by the market, but due to lackluster ecosystem development, its attention waned in the six months after going live. Recently, with Sui entering the top 10 blockchain ecosystems by TVL, many users are re-evaluating the future of this Layer 1 blockchain, especially how it might perform in this year's bull market.
The future opportunity for Sui should exist in the DeFi, GameFi, and RWA sectors. Firstly, with a transaction speed of 270,000 transactions per second, Sui's scalability alreadt surpasses other Layer 1 blockchains, making it well-suited to handle the large number of users and transactions in a gaming or financial setting. Secondly, Sui is one of the only two blockchains using the Move programming language, which is particularly designed for deploying finance-related smart contracts. This year, as more developers recognize Sui's potential and build on Sui, additional ecosystem projects should emerge rapidly, driving the SUI token price up in the bull run.
In terms of brand partnerships, Mysten Labs recently announced collaboration with Alibaba Cloud and ChainIDE to develop AI tools aimed at simplifying Move code development. Programmers will be able to use natural language processing to write Move code with simple, intuitive prompts. This collaboration is expected to enhance the productivity for all Move developers, while reducing the entry barriers for new developers. The amalgamation of artificial intelligence and blockchain might very well propel the Sui ecosystem towards the next stage of prosperity.
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