Sui Network Could Challenge Solana in the Leading Layer-1: K33 Research

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Sui Network, a promising layer-1 blockchain, may soon challenge Solana’s dominance in the alternative blockchain space, according to a recent analysis by K33 Research. In a note published on September 18, K33’s DeFi analyst David Zimmerman highlighted Sui’s potential to become a strong contender among “alt L1s,” especially given its recent performance and technological capabilities.

Sui vs. Solana

Sui has been outshining Solana in certain metrics, notably in market performance. Since the start of August, the SUI/SOL trading pair has gained an impressive 115%, while SOL/ETH has seen a more modest 6% increase.

Zimmerman attributes Sui’s recent 36% price surge to a combination of factors, including the network’s architecture and upcoming developments, but also cautions that some of this performance may be linked to wider market mispricing.

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USDC Integration

One of the key developments for Sui is the upcoming launch of USDC on the network, announced by stablecoin issuer Circle on September 17. This integration signals growing industry support for Sui, which could help fuel further adoption of the platform.

Zimmerman believes Sui has the technical potential to rival Solana, citing its theoretical maximum transaction processing speed of 297,000 transactions per second (TPS), compared to Solana’s 65,000 TPS. However, practical TPS figures tell a different story, with Sui achieving 854 TPS in July 2023, while Solana’s real-world maximum sits closer to 3,000 TPS.

Need for Larger User Base

Zimmerman noted that while Sui’s technology is impressive, it has yet to outpace Solana in terms of daily average TPS and actual performance metrics. To do so, Sui will need to attract a larger user base and more capital into its ecosystem. However, one key challenge for Sui’s long-term price stability lies in its token supply.

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Only 27% of Sui’s total token supply is currently in circulation, leaving room for future token unlocks that could lead to significant sell-offs. In contrast, 80% of Solana’s supply is already circulating, offering more stability for investors.

Other Ventures

In addition to its technical offerings, Sui is also preparing to make a splash in the gaming world with the upcoming release of SuiPlay0x1, a handheld gaming console developed by Mysten Labs. The console is set to include a native NFT called “Eternals,” which could provide users with exclusive rewards. Zimmerman compared this to Solana’s Saga mobile device, which offered airdrops that exceeded the initial cost of the phone, making it attractive to speculators.

While Zimmerman sees potential for Sui to close the gap with Solana, he remains confident that Ethereum’s position at the top of the blockchain hierarchy is secure.